The TMCA

The crinkle sound of the gold foil. The rich smell of honey and almond. The unique design of peaks and valleys. And the delicious taste of Swiss chocolate. There is little doubt that since its creation in 1908, Toblerone-branded chocolate has made a name for itself in the chocolate world. But one of its original and defining characteristics has recently been cast into doubt—its “Swissness.” In 1868, Jean Tobler opened a confectionery shop in Bern, Switzerland that was an immediate success and grew into a chocolate factory by 1899. A decade later, Jean’s son, Theodor Tobler and his cousin, Emil Baumann, invented a unique and innovative chocolate bar, a special recipe of milk chocolate, almond-based nougat, and honey formed into a distinct triangular shape. Theodor named this new confection “Toblerone,” a combination of his last name, “Tobler,” and “Torrone,” the Italian word for honey and almond nougat. The chocolate bar’s popularity and international recognition only grew from there, including a feature at the 1964 World’s Fair in New York City and the Expo in Montreal in 1967. In 1969, different varieties of the chocolate where introduced, and in 1970, the now infamous packaging was changed to add a depiction of the Matterhorn in the Swiss Alps, Switzerland’s highest and most famous mountain. Since this time, packages of Toblerone has included various indicators that the chocolate bars were manufactured in Switzerland, including the Matterhorn icon and statements like “of Switzerland,” and “Swiss milk chocolate.” Until recently, Toblerone was undoubtedly “Swiss,” as every chocolate bar bearing the Toblerone name since 1908 has come from Switzerland. But in late 2022, Mondelez International, the now owner of Toblerone, announced that some—but not all—of the chocolate bar’s production would be moved from its location in Bern, Switzerland to Bratislava, Slovakia in July 2023. And this decision has cost it its “Swissness.” Effective January 1, 2017, the Swiss government enacted legislation to protect the “Swissness” of the goods and services emanating from the country, with the goal of protecting the “excellent reputation” Swiss indicators of source enjoy both domestically and abroad. The legislation regulates the “Made in Switzerland” statement, the Swiss cross designations, and images of the iconic Matterhorn mountain, all of which the Swiss government views as part of the overarching Swiss brand. The Swiss government notes that “Swiss products and services are associated with exclusivity, tradition and quality, with their goods reputation inspiring confidence in the product or service in question and ultimately influencing the consumer’s buying decision.” As an added benefit, strict regulation surrounding these Swiss designations provide a clear competitive advantage for manufacturers and service providers who are able to demand a higher price for their “Swiss”-branded fares. This law stems from an intellectual property principal recognized in Europe and elsewhere in the world, but not in the United States, known as “geographic indicators.” Geographic indicators, which we have previously written about, are used to label products that directly specify a product’s particular geographic origin, like “champagne” from France or “parmigiano reggiano” from Italy. Technically speaking, sparkling wine from California cannot bear the “champagne,” “prosecco,” or “cava” labels, nor can cheese from Wisconsin be called “gouda” or “feta.” Certain geographic indicators can be registered under the European Community regulations, which in turn confers certain exclusive rights to the registered owner and protects the association of certain food and beverage characteristics within that particular geographic region. The 2017 “Swissness” law falls under this geographic indictor of intellectual property protection. Anyone wishing to use a “Swiss” designation on products or in connection with rendered services must meet strict criteria in proving they are “Swiss” enough. As is relevant to Toblerone’s confections, to qualify as “Swiss,” at least 80% of the raw materials used to create foodstuffs must originate in Switzerland. However, for milk and dairy products in particular—under which chocolate falls—the weight of milk as the raw material must equal 100%. Further, essential processing for milk products must be done inside the country, with few exceptions. In short, milk products must be made exclusively in Switzerland in order to use Swiss designations. Mondelez International’s decision to move its production of Toblerone chocolate to Slovakia defies this exclusivity, and therefore, is no longer deemed “Swiss.” Although some Toblerone chocolate will still emanate from the Bern factory, in order to comply with this “Swissness” law, Mondelez International announced plans to replace the Matterhorn with a more generic mountain-shaped icon, and will instead state that the chocolate was “established in Switzerland 1908,” instead of being “of Switzerland.” Some may view this Swissness law as overly strict, but others, including the Swiss government, see it as necessary to protect the strength and reputation of its brand. Citing consumer surveys, the Swiss government as justified this legislation by claiming the value Swiss branding adds to goods is as much as 20% of the sales price, and nearly 50% for luxury goods. While the benefit to companies and goods manufacturers is clear, it is equally as strong for consumers, who can rest assured that products bearing the Swiss cross or “made in Switzerland” statements are, in fact, Swiss. Despite the fact its product packaging is changing and it may not be “Swiss” anymore, Mondelez has reassured Toblerone fans and chocolate connoisseurs alike that the recipe, taste, and distinctive product shape of the famous chocolate bars will stay the same.

When you hear the word “gruyere,” what comes to mind? A bucolic region in the mountains of Switzerland? Perhaps the Gruyère region of neighboring France? Or, more likely, you think of a type of cheese. Not just any old cheese though – according to the Oxford Companion to Cheese, gruyere cheese is “widely considered among the greatest of all cheeses.” In a delightfully cheese-pun stuffed decision, the Fourth Circuit Court of Appeals recently held that U.S. cheese consumers primarily think of “gruyere” as a type of cheese, rather than a product specific to the Gruyère regions of Switzerland and France. As such, the Court found that the term “gruyere” was too generic to warrant a certification mark of geographic origin. As the Fourth Circuit explained, gruyere cheese originated in the district of La Gruyère in the Canton of Fribourg, Switzerland, in 1115 AD. The original area of production expanded to include other areas of Switzerland and certain neighboring areas of France. According to sources the court quoted, Swiss and French gruyere “producers make cheese from the unpasteurized milk of cows that graze on alpine grasses.” As is common in Europe, Switzerland and France have approved “Gruyère” as a protected designation of origin and a protected geographical indication, respectively. Those designations set forth detailed requirements for the gruyere production process, including that the cheese only be produced in specified areas of Switzerland and France. The U.S., however, does not extend similar protections to gruyere cheese. While the FDA has a general standard of identity of “Gruyere cheese,” that standard does not impose any geographic restrictions on where gruyere-labeled cheese can be produced. It’s no surprise that, as a result, cheese from all over the world – as well as from U.S. states such as Wisconsin and Idaho – has been labeled and sold as gruyere in the U.S. for decades. Of course, it’s also not a huge surprise that Swiss and French gruyere producers aren’t terribly keen on (maybe even cheesed off about) what the court termed “the indiscriminate labeling of cheese as gruyere in the United States.” In 2015, a Swiss and a French gruyere consortium (appellants in the Fourth Circuit case) teamed up to file an application with the USPTO to register the word “GRUYERE” as a certification mark. The intended mark would certify that the cheese originates in the Gruyère region of Switzerland and France, and would preclude any cheese produced outside that region from using the “GRUYERE” label. However, a group of U.S. dairy producers/importers (appellees in the Fourth Circuit) opposed the certification mark, arguing that the term “gruyere” was generic as to cheese and therefore not eligible for the certification. The TTAB agreed with the Opposers that “GRUYERE” is generic and could not be registered as a certification mark. After the Consortiums challenged that decision in a Virginia district court, the district court reached a similar conclusion and granted summary judgment for Opposers. The Consortiums then appealed to the Fourth Circuit, which noted that “[l]ike a fine cheese, this case has matured and is ripe for our review.” (Given the number of cheese puns in the decision, one wonders if the judges and their clerks nibbled on some gruyere while drafting the opinion.) The court began with a brief but helpful refresher course on certification marks, including indications of regional origin. The federal Lanham Act, 15 U.S.C. § 1127, defines a certification mark as “any word, name, symbol, or device, or any combination thereof” that is used “to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person’s goods or services or that the work or labor on the goods or services was performed by members of a union or other organization.” The court explained that, unlike a typical trademark, a “geographic certification mark is not used by the owner of the mark; rather, the owner of the certification mark controls how others use the mark.” Certification marks are, however, registrable “in the same manner and with the same effect as are trademarks.” 15 U.S.C. § 1054. Of course, this means that the same standards apply – including that a generic name (i.e., the name of a class of products or services) is ineligible for registration as a certification mark. The Fourth Circuit noted that the “critical issue in genericness cases is whether members of the relevant public primarily use or understand the term sought to be protected to refer to the genus of goods or services in question.” In this case, the issue was whether the cheese-consuming public primarily understand the term “GRUYERE” as referring to a type of cheese (i.e., generic), rather than indicating that the cheese was produced in the Gruyère region of Switzerland and France (i.e., non-generic). The district court had granted summary judgment to Opposers on the basis of three categories of evidence. First, the FDA standard of identity for “Gruyere cheese” indicates the mark is generic. Second, the district court held that USDA import data (which showed the prevalence of imported gruyere from countries other than Switzerland and France), as well as evidence of domestically produced gruyere-labeled cheese, favors a finding of genericness. Third, the district court found that “common usage” of the term gruyere shows that it is generic. On appeal, the Fourth Circuit agreed with the district court that the FDA standard of identity for “Gruyere cheese,” which does not contain any geographic restrictions on where the cheese can be produced, supports a finding that the term “GRUYERE” is generic. The court noted that, while the FDA standard of identity for “Gruyere cheese” does not preclude registration of the “GRUYERE” certification mark, that standard of identity “presents strong evidence that GRUYERE is a generic term.” Moving on to the second category of evidence (non-Swiss/French imports and domestically produced gruyere), the Fourth Circuit agreed with the Consortiums that the district court made an improper inference from the USDA import data. Specifically, the district court erroneously concluded that that data showed that the majority of gruyere-labeled cheese imported into the U.S. was from countries other than Switzerland and France, when that was unclear at best. Unfortunately for the Consortiums, despite this improper inference, the Fourth Circuit nonetheless held that “a substantial quantity of cheese has been imported to the United States from countries other than Switzerland and France and sold to consumers as gruyere.” Similarly, while conceding that some of the Consortiums’ criticisms of the domestically-produced gruyere cheese evidence had merit, the appellate court still concluded from the evidence that millions of pounds of domestic-produced cheese are sold as gruyere in the U.S. Next, the Fourth Circuit discussed the evidence of common usage of the term gruyere. Yet again, the court found that even though the district court had made mistakes, they didn’t impact the conclusion. The district court had first looked at various dictionary definitions of the term gruyere and concluded that most of those definitions did not limit the meaning of gruyere to cheese produced in Switzerland and France. But, as the Consortiums pointed out, some definitions do define “Gruyere cheese” as being produced or originating in Switzerland or France. Thus, the Fourth Circuit held that the district court erred in concluding from dictionary definitions of gruyere that the term was generic. But the district court had also considered references to gruyere in the media, and the Fourth Circuit agreed that those references – many of which described gruyere as originating in places other than Switzerland and France – supports a finding of genericness. Finally, the Fourth Circuit addressed the Consortiums’ argument that summary judgment was improper because Opposers failed to provide consumer survey evidence. In the court’s words, that “argument slices the cheese too thinly.” While survey evidence is common in genericness cases, it is not mandatory and evidence of consumer understanding of a mark may be obtained from any competent source. In sum, the court held that because the evidence made clear that cheese consumers in the U.S. understand “GRUYERE” to refer to a type of cheese (and not cheese from a particular region), the term is generic and the district court properly granted summary judgment to Opposers.

In order to strengthen the protection of the intellectual property rights and improve the quality control of trademark prosecution and enforcement, China issued a number of new regulations and practice guidelines in late 2022. The purpose of the new regulations, which were issued by the China National Intellectual Property Administration (the “CNIPA”) and the State Market Supervision Administration (the “State MSA”), was to further guide and regulate trademark practice as well as trademark agency conduct. In addition, on January 13, 2023, the CNIPA published the Draft Amendment of the PRC Trademark Law for Public Comments. The State MSA also published the Draft Amendment of the PRC Anti-Unfair Competition Law for Public Comments on November 22, 2022. This post will provide a brief update on these recently published regulations and guidelines regarding trademark practice in China, including highlighting the aspects that are relevant to foreign brand owners and foreign trademark practitioners. 1. Detailed Rules on Administration and Supervision of the Conduct of Trademark Agencies In China, most of the trademark applications are filed in the PRC Trademark Office through agencies such as law firms or companies that provide IP services. For foreign brand owners, a frequent concern and challenge in China is the prevalence of trademark squatting activities. As part of the Chinese government’s efforts to tackle this problem, the 2019 PRC Trademark Law seeks to address this problem by regulating these trademark agencies’ practice and conduct. For example, Article 19 of the PRC Trademark Law imposes certain duties on trademark agencies and prohibits certain conduct. A trademark agency violating any of those provisions under Article 19 may be penalized under Article 68 of the PRC Trademark Law. On October 27, 2022, the State MSA issued the Rules on Administration and Supervision of Trademark Agencies (the “Trademark Agencies Rules”), which came into effect on December 1, 2022. These new Rules supplement the general provisions (such as Articles 19 and 68 mentioned above) under current PRC Trademark Law and its implementation measures with respect to the practice and the conduct of trademark agencies in China. Specifically, Section 29 of the Trademark Agencies Rules explains what constitutes “disturbance to the market order of trademark agencies by way of slander or other improper means” under Article 68(2) of the PRC Trademark Law by setting out ten (10) specific practices that are prohibited. One of practices that is prohibited under Section 29(1) is for a trademark agent to accept an instruction to file a trademark application knowing that it is for a mark that is taking advantage of sudden events, quick fame gained by internet celebrities, influencers, hot topics or buzz words. In September 2022, just shortly before the Trademark Agencies Rules was issued, the trademark agency Alibaba Technology (Beijing) Co., Ltd was ordered by the local MSA to pay a fine in the amount of RMB80,000 (~US$12K) for accepting instructions to file trademark applications for a trademark squatter for the mark “谷爱凌GU AI LING” and “Eileen GU”, which are the Chinese and English names, respectively, of a freestyle skier who quickly gained great fame in China during the 2022 Winter Olympic Games held in Beijing. Under Section 23 of the Trademark Agencies Rules, if a trademark agency is intentionally involved in any IP infringing activities, such as submitting a bad faith trademark application, it will not only be penalized under the PRC Trademark Law, but will also be placed on a blacklist of enterprises deemed to have engaged in illegal and/or dishonest conduct. 2. Guidelines On Avoidance of Conflict with Prior Rights in Article 32 of the PRC Trademark Law On December 7, 2022, the CNIPA issued the "Guidelines on How to Avoid Conflict with Prior Rights in Trademark Application and Use" (the “Prior Rights Guidelines”), whereby it provided further clarification on the scope of “prior rights” under Article 32 of the PRC Trademark Law. This guidance included providing case examples and guidelines on how to avoid conflict with existing prior rights when applying for trademark registration in China. The Prior Rights Guidelines expand on the list of prior rights to include rights and interest in the title of a work, the name of a famous role in a work, the name of a database or a virtual figure. Such rights have previously been recognized by various decisions of the Chinese courts. In this regard, the Prior Rights Guidelines provide a case example in which protection of an opponent’s prior rights in the name of the world’s first Chinese Vocaloid and virtual figure “LUOTIANYI” was granted by the Chinese trademark authorities. 3. Clarifications On Class 35 Services in China On December 7, 2022, the CNIPA also published another important guideline providing clarifications on Class 35 services items, namely, the “Guidelines on the Application For and the Use of Service Marks in Class 35” (the “Class 35 Guidelines”). The Class 35 Guidelines provide a detailed interpretation of the service items in Class 35 in the PRC Goods and Service Classifications. In a nutshell, the Class 35 Guidelines explain that the services covered in Class 35 refer to services that are provided to others and to assist others’ business and operation rather than to the registrant itself for its own business operation. For example, advertising and promotion of one’s own trademarked clothing products does not qualify as “advertising” services under Class 35, but instead is use of a trademark for clothing under Class 25. By contrast, the typical use of a trademark for “advertising” services in Class 35 includes advertisement planning, design, and production for a third party’s products and/or services. Although Chinese courts have made similar clarifications in adjudicating trademark cases, the Class 35 Guidelines now provide clear guidance to assist trademark practitioners in understanding Class 35 services. However, foreign brand owners should know that this does not mean that Class 35 is unimportant and a brand owner should include Class 35 in its trademark portfolio in order to obtain proper trademark protection in China. By way of example, if a clothing products brand owner does not protect its trademark rights by securing trademark registration in Class 35, its brand name may be pirated by a third party in Class 35. The third-party pirate could then use the brand name as a shop name for selling clothing products, and the brand owner would likely find it difficult to stop the third party from using the shop name even if consumer confusion was obvious. 4. New Draft Amendments to the PRC Trademark Law and the PRC Anti-Unfair Competition Law for Public Comments On January 13, 2023, the CNIPA published the Draft Amendment of the Trademark Law of PRC on its website for public comment. The draft has introduced 23 new provisions into the trademark law as well as substantive amendments to 45 provisions in current trademark law. Significant amendments in the draft include the prohibition on repeated trademark applications for the same mark in respect of the same goods or service item by the same applicant/registrant, the introduction of “promise to use” requirement, and a related mechanism to remove registered trademarks that are not in use after five years of registration. In addition, on November 22, 2022, the State MSA released the Draft Amendment of the Anti-Unfair Competition Law of PRC for public comment. We will continue to monitor any developments on these important legal changes in China and make sure to keep you updated.

When Journey was inducted into the Rock and Roll Hall of Fame in 2017, Steve Perry was ranked 76th on Rolling Stone’s “100 Greatest Singers of All Time.” Arguably, many Journey fans view the front man and his voice as the core identifier for the band and its most popular and commercially successful music. After considerable success between 1978 and 1987, Perry left the band and the band took a hiatus until 1995. Perry agreed to reunite with the band under a new manager, and the band enjoyed the success of a new album. However, in 1998, Perry left the band permanently and the face of Journey was After All These Years, changed. An Agreement between the parties in 1997, the so-called “Elmo Agreement,” set forth the terms of profit sharing. The Agreement was amended in 1998 when Perry left the band, and Neal Schon and Jonathan Cain, longtime guitarist and keyboardist for Journey (respectively), state that Perry still “receives a significant share of profits from the exploitation of the Journey song marks.” Fast-forward to Fall 2020. Freedom NJ LLC, a company run by Schon and Cain and current members of the band, filed 20 new trademark applications for well-known song titles for merchandise, including such hits as Don’t Stop Believin’, Who’s Crying Now?, Wheel in the Sky, and Any Way You Want It. All of the applications matured to registration in early 2022. Notably, none of the applications were challenged by Perry when published for opposition purposes. In September 2022, Perry filed a Petition to Cancel each of the 20 trademark registrations, alleging that the applications should not have been filed without his authorization. The 1997 Elmo Agreement states that “any use or exploitation, or grant or license of rights in or to any Group Composition(s), in whole or in part, including, without limitation, the titles thereof in connection with any product or otherwise, without the prior, written, unanimous consent of all of the Partners in each instance.” Perry, as a partner to the Agreement, was apparently not consulted about the applications. The Elmo Agreement was amended in 1998, addressing Perry’s departure from Journey, but Perry asserts that the amendment did not change the unanimous consent requirements in the Agreement of 1997. Schon and Cain subsequently assigned their interests and rights in the songs subject to the Elmo Agreement in 2019 and 2020, respectively, but Perry has not transferred any of his rights and interests. Thus, Perry asserted that the registrant, Freedom NJ, is not the owner or the user of the trademarks registrations, because Perry never provided his consent to the use or registration of the titles as trademarks for merchandise. Aside from asserting an ownership issue, Perry also alleged that the applications were fraudulent in making statements that the registrant had exclusive rights to the marks, that the marks were not in use, and that the song titles as trademarks falsely suggest a connection with Perry as the lead singer of the 20 songs. In response to the Petition to Cancel, Freedom NJ filed its Answer in early December 2022 asserting affirmative defenses, including: (1) the marks have been in use since the 1970s and 1980s with no objection from Perry; (2) Perry has received proceeds resulting from the licensing of the registered trademarks; (3) cancellation of the registrations would lead to prejudice to both Perry and Freedom NJ; (4) Perry uses a company called Pear Co. to manage assets, and both Pear Co. and Perry are signatories of the Elmo Agreement, thus Perry should not be shielded from liability through Pear Co.; and (5) Perry’s substantial income from current Journey tours and albums is in jeopardy as a material breach of the Elmo Agreement through the filing of the Petition to Cancel the registrations. Additionally, Freedom NJ asserted the following defenses: laches (Perry was not diligent in pursuing these claims), acquiescence and waiver (Perry accepted the benefits of the Elmo Agreement), bad faith and unclean hands (Perry accepted the benefits of the Elmo Agreement and breached the agreement by filing the cancellation), and breach of contract (breach of Elmo Agreement terms). On January 4, 2023, counsel for Perry withdrew the Petition to Cancel the 20 registrations, and because Freedom NJ had already filed its Answer and the withdrawal was without its consent, the Petition for Cancellation was denied with prejudice. This means that Perry cannot challenge these registrations in the future. Why did the Petition seem to take the midnight train going anywhere but the finish line at the Trademark Trial and Appeal Board? At its crux, this TTAB filing did not ever seem to be about trademarks. Rather, it was about the terms of the Elmo Agreement between the parties. Perry appears to have gained nothing but expenses by filing the Petition to Cancel the 20 registrations, all while continuing to receive financial benefit from the licenses tied to the trademarks in the interim. Did Freedom NJ welcome this outcome with Open Arms? Schon posted on Twitter a screenshot of the filing and said “So much for [Cain] trying to throw me under the bus as he claimed I was blatantly trying to rip off [Perry] while collecting the checks for the very diligent work my wife and I did to protect our merch.” Cain separately filed a lawsuit in November 2022 against Schon in California for “running up enormous personal charges on the band’s credit card account.” Perhaps Schon and Cain are also going Separate Ways. If the band members, both present and past, cannot Faithfully follow the terms of their Agreements, they surely cannot have it Any Way [They] Want it. As the Wheel in the Sky keeps on turning, we will provide updates on further developments.

How would you pronounce #law? Is it “hashtag law,” as the PTO examiner suggested would be the most common understanding, or “pound law,” as alleged by the unsuccessful registrant of #law as a service mark. And to what does it refer: a hashtag for a social media topic, or a number that can be dialed from a mobile phone to reach an attorney referral service? Law firm Pound Law, LLC filed a lawsuit against the PTO and its director, arguing that its application for #law was improperly denied. According to Plaintiff, “the #LAW mark has become widely recognized by the relevant public as a distinctive brand and as a mnemonic/vanity telephone number mark uniquely associated with the services of Morgan & Morgan,” because Plaintiff spent “hundreds of millions” of dollars advertising it since 2006. Notably, this #law apparently only applies to telephone calls made on a mobile phone; it does not work on landlines, and the firm uses the website “www.forthepeople.com” and not either Pound Law or Morgan & Morgan. The examiner, and TTAB, decided that “consumers would not perceive [Plaintiff’s] use of #LAW as a source indicator but rather only as a means to contact [Plaintiff], based on the manner of use.” The history of this mark illustrates how quickly technology has unfolded over the past 15 years. Morgan & Morgan allegedly began using #law as a mnemonic and vanity phone number in 2006—the same year Twitter was founded. A few years later, Twitter took off: it had 300,000 tweets per day by the end of 2008, which ballooned to over 50 million tweets per day by early 2010. In 2022, there were over 500 million tweets per day, a non-negligible number of them using #law to identify the subject. A Twitter search renders countless tweets from law firms to law schools, legal consultants, protestors, and coaches using #law. Is Morgan & Morgan’s use really as “unique” and “distinctive” in 2023 as it may have been in 2007? The treatment of this mark calls to mind the Booking.com saga, covered extensively in this blog. The TTAB determined that the mark “Booking.com” was not registrable on the basis that it was generic, described here. The TTAB decision was overturned by Judge Brinkema in the Eastern District of Virginia, which held that Booking.com had acquired distinctiveness, described here, but awarded fees to the PTO because the case had been brought in district court instead of appealed directly to the Federal Circuit, as described here. The Fourth Circuit affirmed the District Court’s decision that the mark is registrable, but ordered the plaintiff to pay the PTO’s fees on appeal, described here. The PTO petitioned for certiorari to the U.S. Supreme Court, which was granted as described here, and the Supreme Court ultimately ruled that Booking.com is registrable, rejecting the premise that a generic.com term is ineligible for trademark protection, described here. This also calls to mind a different source of trademark obsolescence: trademarks that have been lost due to genericide. Among these are the yoyo, the flip phone and the escalator – all of which were marks associated with one brand until they became so widely used that they no longer identify a specific brand. Will #law go the way of the yoyo, or will it follow the winding path of the Booking.com decisions? Only time will tell.

Justices of the Supreme Court will soon put on their whiskey glasses to decide the proper tests for infringement and dilution claims involving humorous use of another’s trademark. The Court granted certiorari in November to consider a dispute between VIP Products, LLC (“VIP”) and Jack Daniel’s Properties, Inc. (“Jack Daniel’s”) over VIP’s “Bad Spaniels” dog toy, which Jack Daniels contends infringes and dilutes its famous trademarks and which VIP asserts is permissible under the First Amendment. As discussed in a prior TMCA post, the dispute arose in 2014, after Jack Daniel’s sent a letter demanding that VIP cease all sales of its “Bad Spaniels” dog toy, which VIP had been selling since July 2013. A week later, VIP sought declaratory judgment in the U.S. District Court for the District of Arizona, arguing that it had designed the “Bad Spaniels” label to incorporate a few elements of the Jack Daniel’s label design, but had added a number of additional elements to make it clear that the product was a parody and entitled to First Amendment protection (for example, changing the Jack Daniel’s “Old No. 7 Brand Tennessee Sour Mash Whiskey” to “The Old No. 2, on Your Tennessee Carpet”). Jack Daniel’s counterclaimed, alleging trademark infringement, dilution, and unfair competition. The District Court ultimately granted Jack Daniel’s motion for partial summary judgement, finding VIP was not entitled to the defenses of nominative and First Amendment fair use, because it did not use Jack Daniel’s’ identical marks or trade dress. After a four-day bench trial, the District Court ruled in favor of Jack Daniel’s and permanently enjoined VIP from selling the “Bad Spaniels” dog toy. VIP appealed to the Ninth Circuit, which reversed the District Court on the grounds that: (1) the “Bad Spaniels” dog toy is an expressive work entitled to First Amendment protection, and (2) the District Court failed to require that Jack Daniel’s satisfy at least one of the two prongs of the Rogers test. VIP Prods. LLC. V. Jack Daniel’s Props., 953 F.3d 1170 (9th Cir. 2020); see also Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989) (holding that the Lanham Act only applies to expressive works if the plaintiff establishes that the defendant’s use of the mark either: (1) is not artistically relevant to the underlying work, or (2) explicitly misleads consumers as to the source or content of the work). On the dilution claim, the Ninth Circuit also reversed the District Court, because, although VIP used the Jack Daniel’s trade dress and bottle design to sell the dog toy, these elements were also used to convey a humorous message which was protected by the First Amendment, and thus “noncommercial.” Although Jack Daniel’s petitioned for a writ of certiorari in 2020 seeking review of the Ninth Circuit’s decision, the Court denied the petition. On remand, the District Court found that, based on the Ninth Circuit’s decision, the “Bad Spaniels” toy was entitled to First Amendment protection because Jack Daniel’s could not satisfy either prong of the Rogers test. The Ninth Circuit summarily affirmed. In August 2022, Jack Daniel’s again petitioned for a writ of certiorari asking the Court to consider the following questions: Whether humorous use of another’s trademark as one’s own on a commercial product is subject to the Lanham Act’s traditional likelihood-of-confusion analysis, or instead receives heightened First Amendment protection from trademark infringement claims. Whether humorous use of another’s mark as one’s own on a commercial product is “noncommercial” under 15 U.S.C. § 1125(c)(3)(C), thus barring as a matter of law a claim of dilution by tarnishment under the Trademark Dilution Revision Act. Apparently persuaded the second time around, the Court granted Jack Daniel’s’ petition and agreed to hear the case. In its writ, Jack Daniel’s contends that that the Ninth Circuit’s ruling “departs from the decisions of every other circuit to decide this question” and claims it “paves the way for companies like respondent to unleash mass confusion in the marketplace.” It appears that the International Trademark Association agrees and filed an amicus brief arguing: Since the Second Circuit’s decision in Rogers, all other circuits but the Ninth have faithfully limited Rogers to traditionally expressive or artistic works like movies, art, books, and the like. The Ninth Circuit’s decision below continues that circuit’s inappropriate (and concerning) steady expansion of Rogers to any product or service that merely contains discernible expression. This unwarranted expansion beyond the roots of Rogers creates a sharp circuit split on how to balance competing claims of trademark protection and free speech in the context of ordinary commercial products. The Ninth Circuit’s decision threatens a trademark infringement framework that has been intact and applied for nearly a century. Ultimately, if the Court sides with VIP, it would seem to represent a fairly significant expansion of how the Rogers test has typically been applied since it was first articulated in 1989. Notably, an expansion of the types of works covered under the Rogers test would likely leave brands with a narrower scope of protection when dealing with potential infringers claiming “parody” and “artistic expression.” Further, given that the Court is currently considering the Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith case (which involves fair use in the copyright context and which the TMCA has covered here), the Court appears eager to define the role of the First Amendment in intellectual property cases. And the opinion in the Warhol case will almost certainly provide insight into the Court’s likely treatment of the issues in this case. We will be following this case closely, so keep an eye out for our eventual breakdown of the Court’s opinion.

More and more, we see trademark applications being filed for cultural phenomena, viral sensations and catchy hashtags. We’ve covered this topic before. Do you remember #covfefe? A recent non-precedential decision issued just after Thanksgiving once again confirmed that common laudatory phrases are often incapable of functioning as trademarks. The TTAB’s decision in In re Monday Night Ventures LLC was simple: TACO TUESDAY is indeed tasty, but it is not a trademark for beer. The Board found that TACO TUESDAY failed to function as a trademark for beer because it is a widely used message. In reviewing the Examiner’s refusal, the Board’s set out to answer the following question: We must assess whether Applicant’s proposed mark, TACO TUESDAY, functions as a mark based on whether the relevant public would perceive TACO TUESDAY as identifying the source or origin of the beer. To perform the failure-to-function analysis, the Board reviewed the evidence of record, which consisted of the specimens of use (including a beer menu), the mark as shown on a mockup of a beer can and lots of third-party use of Taco Tuesday submitted by the Examiner. The third-party use fell into two categories: (1) general uses of Taco Tuesday to refer to events on Tuesdays featuring tacos and drinks, including beer and (2) uses of Taco Tuesday on or in connection with beer. Notwithstanding the voluminous evidence of third-party use, the Applicant contended that the failure-to-function refusal was “illogical and incongruous” because TACO TUESDAY is not informational when applied to beer. The Board disagreed. After reviewing the evidence, the Board concluded that Taco Tuesdays often involve beer consumed with tacos. “Thus consumers are accustomed to encountering ‘Taco Tuesday’ in the context of beer.” While the beer menu specimen was adequate and did not show use of the mark in an informational manner, the Board found that Taco Tuesday cannot function as a trademark because of the environment in which it is perceived by consumers. While we surely did not need the Board to tell us that Taco Tuesdays and beer are a great pairing, the decision does provide helpful guidance for would-be trademark applicants of cultural phenomena. Common phrases are often incapable of functioning as trademarks, especially when applied to goods or services that are complementary to the phrase. It is a pretty safe bet that the USPTO would also likely reject TACO TUESDAY for margaritas, but would such a refusal extend to wine? I think wine and tacos are great together, but we’d be wise to see how many restaurants and wineries do a taco-wine pairing before fling an application. In fact, checking the internet before making a trademark filing for one of these types of marks is a great suggestion. While you might be first to file, that doesn’t mean the USPTO will let you have exclusive rights. A better strategy for one of these catch phrase trademarks might be to apply it to goods and services which are actually illogical and incongruous with the phrase. So go and enjoy some tacos and beer – it is Tuesday after all.

In MGFB Properties, Inc. v. Viacom Inc., the U.S. Court of Appeals for the Eleventh Circuit recently sided with Viacom and its subsidiary MTV in a trademark action brought by the owners of the Flora-Bama Lounge, who alleged infringement by the television series MTV Floribama Shore. The court held that the title of MTV’s show was protected by the First Amendment, applying the familiar Rogers v. Grimaldi test, which assists courts in balancing Lanham Act protection against free speech. The Flora-Bama Lounge bills itself as “the most famous beach bar in the country.” The lounge faces Orange Beach on the Florida-Alabama state line. Established in 1964, the Flora-Bama Lounge’s owners operate a restaurant and liquor store that also use the Flora-Bama name and host entertainment and athletic events. In 2013, the owners obtained a federal trademark registration for FLORA-BAMA for bar and restaurant services, among other things.   The lounge and the trademarks have made a splash in popular culture (or in the more legalistic telling of the Eleventh Circuit: “have been featured in artistic works by third parties”). Jimmy Buffett’s 1984 song Ragtop Day mentions a plan to “Get ourselves a cool one at the Florabama,” Kenny Chesney named a tune after the establishment, crooning: Sitting here at the Flora-Bama ’Bout to open up a big old can of Good times, unwind Fall in and out of love in the same night Can’t say I got a whole lot of cares I’m in the red neck Riviera It’s getting crazy, getting hammered Sitting right here at the Flora-Bama At the Flora-Bama Chesney packed 25,000 attendees on condo balconies, the beach, and boats near Flora-Bama Lounge for a 2014 concert he called “Flora-Bama Jama,” which was broadcast on Country Music Television, another Viacom channel. Fellow country music performer Neil Dover similarly penned a tribute to FloraBamaTime, where “you leave the world behind.” The lounge has also been described in books, films, and major news outlets. The conflict between the parties had its roots in Jersey Shore, MTV’s television series featuring 20-somethings who live in a beach house in New Jersey. Wanting to ensure that readers who have not watched Jersey Shore understand the show, the Eleventh Circuit explained how the Jersey Shore cast was perceived as belonging to a “sub-culture centered on a love of clubbing, taking care of one’s physical appearance, and a dedication to family and Italian culture.” That’s one way of putting it. Regardless of description, Jersey Shore was a hit that lasted six seasons and spawned several spinoffs. In 2016, MTV sought to revive the Jersey Shore franchise by developing a new series focused on Southern beach culture. That effort would become MTV Floribama Shore. The show’s name began with MTV’s goal of a Shore series that would highlight Southern beach culture. MTV also considered “Florida Shore,” but didn’t feel like that would capture the Gulf Coast setting and might be associated with Miami, which MTV thought had its own culture. MTV also considered “Gulf Shore,” but passed on that name because it sounded too much like another MTV show, Siesta Key. MTV settled on “Floribama” because that name would offer a sense of the subculture and part of the country MTV desired to feature. MTV was aware of the Flora-Bama Lounge during its development, mentioning it in an internal slide deck profiling the region. MTV also commissioned third-party marketing research, which found that 34% of 300 young people familiar with the region had heard the term “Flora-bama” and about half of them identified it as the lounge. Other research suggested that the term “Flora-bama” was either unknown or thought to refer strictly to the lounge. Just before MTV Floribama Shore was set to premiere in 2017, the lounge owners sent a cease-and-desist letter insisting that MTV change the name. MTV declined, the show premiered as scheduled, and it aired for four seasons. In 2019, after the second season aired, the lounge owners sued in Florida federal court, claiming trademark infringement and related torts. They alleged actual confusion, such as lounge patrons asking musicians if they had ever met cast members of the show or inquiring of staff as to when the cast would be in the lounge. According to the lounge owners, an elderly patron even criticized the lounge “for allowing MTV to air such a terrible depiction of the Flora-Bama.” The lounge owners also pointed to expert testimony claiming the show blurred internet search results for the lounge and the show, and that 22% of respondents to a survey were confused as to the sponsorship, approval, or affiliation between the lounge and the show. In response, MTV moved for summary judgment—and won. The Eleventh Circuit upheld the district court’s conclusion that the title MTV Floribama Shore was protected by the First Amendment and thus was a permitted use of the “Flora-bama” name. The court relied on the test for balancing trademark and free speech rights established by the Second Circuit Court of Appeals in Rogers v. Grimaldi—a test we’ve described before. Rogers holds that the title of an artistic work is not trademark infringement “unless the title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.” Applying the first part of the test, the Eleventh Circuit concluded that the name MTV Floribama Shore was “well above the artistic reference threshold.” “Floribama” describes the subculture profiled in the series, as well as the geographic area where that subculture exists—“Flori” for Florida and “bama” for Alabama. Also relevant was the addition of MTV’s house mark, and “Shore” to tie the series to the Jersey Shore franchise. The court rejected the lounge owners’ contention that a trademark must be necessary to the name of an artistic work for the work to receive First Amendment protection. The court held that “a title will be artistically relevant when it is necessary to use the title” but that does not mean that “a title must be strictly necessary to be artistically relevant.” (And in the Eleventh Circuit’s view, it would be improper for courts to decide what forms of expression are “necessary” to an artistic work.) Next, the court analyzed the second part of the Rogers test—whether the MTV Floribama Shore title explicitly misleads as to the source of the work. In a previous decision, the Eleventh Circuit had refined this question as “whether (1) the secondary user overtly marketed the protected work as endorsed or sponsored by the primary user or (2) otherwise explicitly stated that the protected work was affiliated with the primary user.” The court concluded neither had occurred here. The court rejected the lounge owners’ survey evidence because there was no suggestion that any misunderstanding was engendered by an overt claim of affiliation by MTV. The court observed that the “MTV” house mark and “Shore” were added to the “Floribama” name, which undercut the lounge owners’ argument that the show’s name was intended to mislead. And although the owners charged that MTV’s use of the name was intentional, the court pointed out that even intentional copying of a mark does not supplant the Rogers test, a case in which a title received First Amendment protection even though it intentionally copied a mark. Finally, the court addressed a much-discussed footnote in Rogers, which provides that the test in Rogers would not apply when an artistic title is confusingly similar to other titles—the so-called “title-versus-title” exception. In the thirty-plus years since Rogers, no other circuit court has explicitly adopted the footnote’s rule. The Eleventh Circuit decided it need not resolve that legal question because the footnote exception didn’t apply. Here, the lounge owners’ Flora-Bama mark is not the title of an artistic work—it is a trademark used to identify the lounge and other businesses. The lounge owners sought to portray third-party use of the mark, such as by Kenny Chesney, as meaning that their mark was used as a title. The court rejected this theory, relying on basic trademark law. The third parties who used “Flora-Bama” in the titles of their artistic works did not do so to suggest that the works originated from the lounge. The titles identify what the artistic works are about, not who produced them. After all, Chesney might have been “sitting right here at the Flora-Bama,” but there was no evidence that the lounge was the source of his song.

Casa Bonita – a self-described “Eatertainment” establishment near Denver, Colorado, featuring cliff divers, stage shows, and subpar Mexican food, appeared destined to become another Covid-19 related restaurant casualty. In 2020 Casa Bonita initially ceased operations due to a local order mandating the closure of indoor restaurants and entertainment due to the global pandemic. As a result of a lengthy closure and ensuing restrictions on indoor dining and entertainment establishments, Casa Bonita fell behind on its rent payments. On April 6, 2021, facing an eviction suit from its landlord, Summit Family Restaurants, Inc., the owner of Casa Bonita, filed for Chapter 11 bankruptcy protection: In re Summit Family Restaurants, Inc., Case No. 21-13328-MER (Bankr. Colo.). With the National Restaurant Association reporting that more than 90,000 restaurants have closed due to the pandemic, a standalone restaurant’s closure and subsequent bankruptcy filing would typically be unremarkable. However, most local restaurants do not have the benefit and notoriety of their own South Park episode. Casa Bonita gained national attention in 2003 when South Park, an animated series on Comedy Central, released an episode titled “Casa Bonita.” The episode features Casa Bonita as the much sought-after location of character Kyle Broflovski’s birthday party, to which heckler Eric Cartman is not invited. Cartman spends the episode manipulating his way onto the guest list (including kidnapping an invitee) to visit the “Disneyland of Mexican Restaurants.” Summit Family Restaurants sought to sell Casa Bonita in its bankruptcy case. The sale was complicated by the large pre-petition claim owed to the landlord whose consent was needed to consummate a sale. Additionally, the intellectual property required to operate Casa Bonita was held by a separate but related non-debtor entity, meaning that a buyer would also need to reach a deal with the third party in order to actually operate the restaurant. A group of Denver area locals banded together to form “Save Casa Bonita” and attempted to negotiate with Summit to purchase the restaurant. Negotiations broke down when the landlord would not consent to the sale. Enter South Park creators Trey Parker and Matt Stone. Parker and Stone successfully negotiated an agreement to purchase Casa Bonita with the landlord’s consent through the bankruptcy case for $3.1 million, an amount sufficient to pay all of Summit’s creditors in full. The Save Casa Bonita group objected to the sale, arguing that their offer to purchase the restaurant for $3.5 million was higher and better. The group’s founder expressed in an interview that the group sought to avoid for Casa Bonita to become a “‘South Park’ joke or ‘South Park’ fun land.” However, for reasons not publicly specified, Save Casa Bonita ultimately withdrew its objection to the sale. Could this have been because of the separate deal required to acquire or license the intellectual property rights for the restaurant? Maybe - Parker and Stone have publicly expressed their childhood love of the restaurant as a reason for purchasing Casa Bonita, but the timing suggests the purchase was also a strategic business move. The agreement to purchase Casa Bonita was reached shortly after the two entered a six-year, $935 million pact with ViacomCBS that includes 14 streaming South Park movies. Some in the media suspect the acquisition is part of a strategy for Parker and Stone to enhance the value of the South Park brand and capitalize on fandom trends. Parker and Stone recently announced their plans to reopen the restaurant, including improving the food, which was known to be less than stellar. The two have hired Dana Rodriguez, a three-time James Beard Award winner and Denver restaurant owner as the head chef of the new Casa Bonita. However, it appears the quirky charm of the restaurant will remain, including its cliff divers, arcade, and cave, as the new owners have expressed their motto to “change nothing and improve everything.” Time will tell how this investment works out and if and how Stone and Parker further intermesh Casa Bonita and the South Park brand.

Slovenian-born Luka Doncic became a professional basketball player at the young age of sixteen years old and the towering height of 6’7”. He quickly made a name for himself, leading his Spanish team Real Madrid to the 2018 EuroLeague title, while also winning EuroLeague MVP, EuroLeague Final Four MVP, ACB Best Young Player, and ACB Most Valuable Player honors and participating in the EuroLeague 2010-2020 All-Decade Team. Recognizing that the sky was the limit for her young and talented son, Doncic’s mother, Mirjam Poterbin, filed a series of trademark applications with the U.S. Patent and Trademark Office in 2018-2019. The trademarks were intended to protect her son’s likeness for a vast variety of promotional-based goods and services, including computer games for basketball in Class 9, sporting equipment in Class 28, and business management services in Class 35. These trademarks each incorporate a variation of Doncic’s name and the “7” jersey number he was wearing during his time in the EuroLeague. According to the Trademark Manual of Examining Procedure (“TMEP”) § 813, when a trademark identifies a particular living individual, that mark can only be registered “with the written consent of the individual…if there is evidence that the name identifies a specific living individual who is publicly connected to the goods or services.” Unsurprisingly, Doncic gave his mother consent to use his name and protect his interests. The applications matured to registration, and Doncic’s career continued to take off. In 2018, Doncic was selected third overall in the NBA draft by the Atlanta Hawks, and was then immediately traded to the Dallas Mavericks, with whom he currently plays. In his first season in the NBA, Doncic became the youngest 20-point scorer in the Mavericks’ history, scored his first 30-point game, made the NBA’s All-Rookie First Team, and was named NBA Rookie of the Year, all while wearing the number “77” jersey. Everything seemed satisfactory for Poterbin and her up-and-coming NBA superstar son. However, recognizing the need to protect his own likeness and career potential, Doncic founded Luka99, Inc. to handle his business affairs. In 2021, Luka99 filed numerous trademark applications, the most pertinent ones of which include the wordmarks LUKA DONCIC and ORIGINAL HOOPS OF LUKA DONCIC, covering a wide array of goods and services, from printed books about athletes in Class 16 to insulated beverage sleeve holders in Class 21 and basketball hoops in Class 28. However, Doncic immediately ran into problems at the USPTO. The problem? None other than his own mother. On March 9, 2022, the USPTO’s examining attorney refused two of Doncic’s applications based on a likelihood of confusion under Section 2(d) of the Lanham Act with his mother’s existing LUKA 7 trademarks. In an attempt to clear the way for his applications, and in what appears to be an issue of first impression for the USPTO, on September 7, 2022, Doncic filed a cancellation action against his mother’s registrations seeking to revoke his consent under Section 813. His petition for cancellation notes that, on July 23, 2021, he sent his mother a letter “specifically and expressly revok[ing] the consent effective immediately.” As a result, his mother’s marks “remain[] registered without Mr. Doncic’s consent,” which violates Section 2(c) of the Lanham Act. The petition also includes claims for abandonment under Section 14(3) and false suggestion of a connection with an individual under Section 2(a). The outcome of Doncic’s petition is difficult to predict, as neither the TMEP nor applicable case law provide a clear answer to the question whether an individual can revoke their consent once it has been given. Doncic argues that allowing his mother’s registrations to stand will undoubtedly cause consumer confusion, creating the presumption that Doncic is affiliated with, sponsored by, or otherwise connected to his mother’s LUKA DONCIC 7 trademarks. He also points out that he granted his consent in the first place when he was young and reliant on his mother “to provide assistance and guidance for his off-court business opportunities.” But now, as an adult superstar with millions of professional fans, Doncic wants control of his own affairs. Unfortunately for the stare decisis fans out there, the outcome of this case might not establish new trademark law. While the revocation of consent issue is the most fascinating claim in Doncic’s petition, there is an easy way out—abandonment. According to Doncic, his mother is not using the LUKA 7 trademarks, and has no known licensees. As such, her registrations may be subject to cancellation on that ground alone, leaving the consent issue for another day and another matter. But this cancellation proceeding is one to keep an eye on – it could very well result in new trademark law. And new law regarding consent would have far-reaching applications, especially as athletes, including those in college, take a more vested interest in the rights to their own likeness and publicity. Poterbin’s answer to the petition is due on October 17, 2022, and her response (if any) may provide more clarity as to how this action will shake out. At this stage, it’s truly a jump ball.

In a recent Show Cause Order, the United States Patent and Trademark Office took on the ghost of trademark attorneys past or rather it took aim at a scary level of fraud. The USPTO has threatened sanctions against Shenzhen Haiyi Enterprise Management Co. and its affiliates (collectively, “Haiyi”) for allegedly coopting the good name of deceased attorney Jeffrey Firestone and using the fake name “Jackson George” for other submissions. In recent years, the USPTO has tightened restrictions by requiring that all foreign applicants are represented by a licensed U.S. attorney. It also now requires that all filings are submitted using USPTO.gov accounts, which must be registered to individuals and are not to be shared among multiple people. Reports from the USPTO show an uptick in fraudulent filings presumably due, at least in part, to attempts to circumvent the USPTO’s requirement that registrants must eventually show use of their mark in the U.S. Haiyi, an intellectual property consulting firm based in China, allegedly helped applicants and registrants circumvent the rules by filing documents in the names of Mr. Jackson and Mr. George. As detailed in the order, Haiyi filed over 300 submission, “personally” signed by Mr. Jackson, after his death. There are over 2,500 records associated with the fictitious Mr. George, some filed at a suspiciously impossible rate. Two applications were filed at the exact same time from two different computers. Thirteen new applications were filed in a single hour from three different computers. Haiyi also has multiple USPTO.gov accounts registered in Mr. George’s name. The USPTO’s order also detailed how Haiyi filed fraudulent specimens of use, showing mock product lists on dubious websites and fabricated invoices listing vacant lots as shipping addresses. This paranormal activity was sniffed by cross-referencing emails, time stamps, signatures, trademark owners, computer networks, and credit cards used for fee payments. The USPTO’s sleuthing may shed new light on the more robust inquiries sent from Examining Attorneys reviewing trademark filings. If Haiyi cannot provide reasonable explanations for the alleged fraud, the USPTO has threatened to scrub Haiyi’s contact information from all the records, ignore submissions made by Haiyi, terminate proceedings involving Haiyi, delete Haiyi’s UPSTO.gov accounts, and block payments from Haiyi’s credit cards. At the time of this post, the USPTO has not yet sanctioned Haiyi, but we will continue to monitor this developing case.

What additional value does a copyright registration confer on a run-of-the-mill neighborhood social media post? Not a lot, it appears. Earlier this year, the First Circuit affirmed the dismissal of a lawsuit brought by one neighbor against another. From 2002-2017, neighbors in the Davis Square area of the 80,000-person Massachusetts city of Somerville used the Russian-owned social networking platform LiveJournal to host a neighborhood online forum. Starting around 2010, anonymous users posted comments accusing the Plaintiff Jonathan Monsarrat of unsavory things. Monserrat made his own social media post, quoting the forum’s “abuse policy” and threatening to report anyone who had not removed the posts. Monsarrat then filed for copyright protection of his social media post. In 2017, LiveJournal changed its user terms related to censorship – consistent with Russian law – and the then-moderator, Defendant Ron Newman, decided to move the group to a different social media platform. Newman copied all existing LiveJournal threads in whole onto the new platform, including Monsarrat’s copyrighted post and the anonymous posts. Monsarrat sued Newman, alleging defamation, with respect to the anonymous posts, and copyright infringement, with respect to Monsarrat’s post. The federal district court in Massachusetts dismissed the case at the Rule 12 motion-to-dismiss phase, without any discovery. The court dismissed the defamation claims because Newman was within an exemption for re-published information within the Communications Decency Act. The district court also ruled that the publication was fair use “as a matter of law” and the case could be dismissed without discovery. The First Circuit agreed, noting “[W]e can see no plausible argument that Newman has not established fair use.” As many of you know, the fair-use test set forth in the Copyright Act has four factors: (1) the purpose of the use, (2) the nature of the work, (3) the amount of the work used, and (4) the effect of use on the potential market. The First Circuit put it bluntly: “Monsarrat cannot claim with a straight face that Newman’s copying – seven years later and on a different platform – was aimed at the same purpose.” Monsarrat’s purpose was to “encourage users in 2010 to immediately stop harassing him.” While the Court noted the district court had “overreached” by finding that Newman’s purpose was “solely for historical and preservationist purposes,” it noted that Newman’s copying was “at least minimally” transformative and was non-commercial, and therefore the first factor favored Newman. The second factor also favored Newman, because the post’s “brief workaday prose” threatening action “lies much more on the factual and informational side of the line than near the ‘core’ of copyright protection.” And although Newman copied the entire copyrighted work, which would usually tip the scales in favor of the copyright holder on this factor, the court decided this factor favored neither party, because “it would have made scant sense for Newman to take just part of the copyrighted post” and “would have misrepresented what Monsarrat wrote.” The fourth factor – the effect on the market – also favored Newman. The First Circuit agreed with the district court that “there is no plausible market for the copyrighted post,” and Monsarrat did not dispute this point. The court rejected Monsarrat’s argument that the copyright registration itself demonstrated the post’s value. The court logically reasoned that the fact of copyright registration “would be present in every case, and thus be largely beside the point in differentiating one case from another.” The outcome of this case is no surprise, but the procedural disposition is interesting. The court’s opinion was more fact-intensive than most at the Rule 12 stage – an outcome that may not be repeated in a case with less stark facts. And, at the end of the day, Monsarrat’s quest to suppress the harmful comments about him had the reverse effect: they were published nationwide. Be careful what you wish for.

We reported here last summer the outcome of Coca-Cola Company’s petitions to cancel the registrations for the above-captioned marks owned by Meenaxi Enterprise, Inc. Meenaxi appealed the TTAB’s decision to cancel the registrations to the U.S. Court of Appeals for the Federal Circuit. The basis for the appeal was that Coca-Cola did not establish a statutory cause of action based on lost sales or reputational injury as required under Section 14(3) of the Trademark Act. Coca-Cola needed to establish its entitlement to a “statutory cause of action under the Lanham Act” by “demonstrating (1) an interest falling within the zone of interests protected by the Lanham Act and (2) an injury proximately caused by a violation of the Act.” In an opinion issued on June 29, the Federal Circuit held that the TTAB erred in its reliance on evidence that was speculative regarding the claim of damages, and reversed the cancellation of the registrations owned by Meenaxi. There does not seem to be any real question here that Meenaxi’s adoption of the identical trademarks owned by Coca-Cola in India was copycat activity. Nor is there any real question that Coca-Cola’s rights in the THUMS UP and LIMCA trademarks in India and elsewhere outside of the U.S. rise to the level of “famous” trademarks. The primary question is whether the reputation or fame of the marks extended from outside of the U.S. to U.S. consumers such that sales by Meenaxi were presumably riding the coattails of the reputation of Coca-Cola’s marks and thus causing damage to Coca-Cola’s rights. The case did not address the territoriality tension of rights in trademarks owned outside of the U.S. with no established rights in the U.S. and whether such marks are entitled to protection from reputational injury in the U.S. through the Lanham Act. With respect to the evidenciary issue, the TTAB relied upon the affidavits of two Coca-Cola executives that speculated that Indian-Americans would know of the THUMS UP and LIMCA branded products because of an interest in the goods in the United States by Indian grocers, restaurants and other retail outlets. While third parties imported and sold the THUMS UP and LIMCA branded products in the U.S., Coca-Cola did not make any direct sales of its products except for de minimis sales of its THUMS UP product in Atlanta and Orlando. Additional evidence, such as a consumer survey, would have been helpful, but Coca-Cola also did not rely on a famous-marks exception. “It maintains only that it experienced reputational injury in the United States because (1) members of the Indian-American community in the United States were aware of the THUMS UP and LIMCA marks and (2) Meenaxi traded on Coca-Cola’s goodwill with Indian-American consumers in those marks by misleading them into thinking that Meenaxi’s beverages were the same as those sold by Coca-Cola in India.” It appears that Coca-Cola was not directly making more than de minimis sales of the THUMS UP branded product in the U.S. and that it did not own registered trademark rights in either mark in the U.S. at the time it filed petitions to cancel the registrations for the marks owned by Meenaxi. Notably, Coca-Cola has since filed trademark applications for the marks in the U.S. Because Coca-Cola did not provide any evidence that U.S. consumers were aware of the brands and could not demonstrate reputational harm or economic injury, the Federal Circuit did not answer the territoriality vs. confusion questions raised in this case. The majority opinion merely stated that “it remains unclear the extent to which territoriality principle applies” to false designation of origin or misrepresentation of source claims, which do not require U.S. trademark rights to bring. The court’s discussion of its decision in the Person’s Co. v. Christman case (Person’s was a well-known retailer in Japan and its attempt to stop a U.S. citizen from producing goods under its marks in the U.S. was unsuccessful because U.S. consumers were not aware of the mark or its underlying products) seems to indicate that even if Coca-Cola had submitted relevant evidence of consumer awareness in the U.S., without established trademark rights in the U.S., the court might not consider canceling a U.S. registration based on reputational damage to foreign marks due to the territoriality doctrine. Coca-Cola’s pending applications for the THUMS UP and LIMCA marks at the USPTO remain suspended pending the outcome of the cancellation proceedings. Presumably, once the cancellation proceedings are resolved in the TTAB in favor of Meenaxi, these pending applications will be refused registration based upon a likelihood of confusion. How will Coca-Cola respond to the refusal of its applications? Will it instead focus on boxing in Meenaxi’s use and registration of the marks to the U.S. only?

A trademark infringement lawsuit filed in Minnesota by Taco John’s against Minnesota Mexican restaurant Taco Chon Mexican Grill is heating up in federal court and the court of public opinion. Taco John’s is a large restaurant franchise founded in the late 1960s, with more than 300 locations centered in the mid-western United States. Taco Chon is a restaurant founded in 2019 with two locations in Minnesota. Both entities sell similar dishes, like tacos, quesadillas, and burritos, and have similar prices. Claiming consumers are likely to confuse the restaurants, Taco John’s sued Taco Chon in Minnesota federal court in late April. After Taco John’s served its lawsuit, Taco Chon has attempted to capture the public narrative by casting the dispute as a David and Goliath battle between a corporate fast food powerhouse and a local family restaurant. Taco Chon also fired back with a counterclaim for abuse of process. The dust-up highlights the potential public relations blow back when a large brand owner attempts to enforce its rights against a smaller and potentially sympathetic defendant. Taco John’s calls itself “one of the largest Mexican quick-service restaurant brands in America” and traces its roots to a taco stand in Cheyenne, Wyoming that opened in 1968. Taco John’s signature dish is the Potato Olé, a bite-sized, fried and seasoned round potato snack. Taco John’s holds numerous trademark registrations through its trademark licensing entity, Spicy Seasonings, LLC, including a registration for TACO TUESDAY, a Tuesday tradition Taco John’s claims to have launched. Despite its trademark holdings, Taco John’s does not appear to be a frequent trademark litigant—a search of federal court records revealed no other trademark lawsuits in the last ten years. Taco John’s complaint alleges that it first learned of Taco Chon in early 2022. Taco John’s asserts infringement of its TACO JOHN’S marks, citing U.S. Trademark Registration Nos. 1,088,950, 1,617,184, and 1,627,389. Taco John’s alleges that the Taco Chon name is “an attempt to trade on the goodwill and commercial magnetism that Taco John’s has built up in the [TACO JOHN’S trademark] and to free-ride on Taco John’s fame as a preeminent Mexican restaurant brand.” The complaint points out that both Taco Chon locations are located within five miles of Taco John’s stores and that both entities use “the exact same trade channel … quick service Mexican restaurants.” Taco John’s brought claims for federal trademark infringement, dilution, and unfair competition, as well as related state law claims. The Savage, Minnesota, Taco John’s location identified in Taco John’s complaint as 4 miles from the Taco Chon location in Burnsville, Minnesota. Taco Chon was founded in Minnesota in 2019 and opened its first location in a suburb of Minneapolis. It opened a second location in St. Cloud, Minnesota, in late 2021. Taco Chon’s owner (and co-defendant) Juan Ramos attributes the name to his father and has said his family operated a restaurant of the same name in Mexico. Ramos has told the media that he didn’t think about the Taco John’s brand when naming his restaurant because “I never thought it was going to be related because we are Taco Chon, not Taco John’s, you know?” One of two Taco Chon locations, this one located in Burnsville, Minnesota, a suburb of Minneapolis. Taco Chon struck back on social media and attracted regional media coverage of the dispute. Taco Chon characterizes the lawsuit as trademark bullying and denies that consumers are likely to confuse the two entities. Taco John’s has kept a lower profile, but has cast itself as a reluctant litigant, telling the media “We take no joy in enforcing our trademark rights in court against a small business owner and only do so after other options have been exhausted.” The lawsuit has attracted significant media coverage, including from Minneapolis’s CBS and Fox affiliates. Media reports also indicate that Taco Chon intends to fight back. Taco Chon’s social media accounts have numerous references to the lawsuit and generally cast Taco Chon as a victim unable to defend itself against the larger entity. Taco Chon launched a crowd funding page seeking donations to pay for legal counsel, which has attracted modest financial support. In a statement released on Taco Chon’s Facebook page, Taco Chon’s defense counsel characterized the lawsuit as “trademark bullying … that is reminiscent of a schoolyard showdown between the classic bully and his easy target.” The statement went to say that the lawsuit “raises questions of cultural appropriation” because “Taco John’s menu is not Mexican food but features burritos, nachos, and other foods not originating from Mexican cuisine.” Taco Chon filed its answer and counterclaim with the court on May 16, alleging themes similar to its media narrative. Taco Chon characterized the lawsuit as an attempt to “bully a small business owner … to destroy their American dream.” Taco Chon asserts that its “authentic Mexican cuisine” cannot be confused with Taco John’s “Mexican-inspired fast food, which it calls ‘West-Mex.’” Taco Chon’s counterclaim for abuse of process asserts that Taco John’s brought suit “with an ulterior motive of intimidating, embarrassing and harming [Taco Chon]’s reputation.” Just as Taco John’s will need to prove the allegations in its complaint, Taco Chon will need to prove the allegations in its counterclaim through the court process. This lawsuit is not the first time a large brand owner has been accused of trademark bullying after suing a smaller entity. Trademark owners must actively police their marks, or those marks can be weakened through non-enforcement. Still, brand holders must strike a balance between aggressive, appropriate enforcement and an over-zealous approach that creates more public relations blowback than additional brand value. Some choose PR-friendly, whimsical tactics for cease-and-desist letters; others choose less humorous approaches. Another option is a “wait and see” approach—if an infringing user is small (and may not last in business), a trademark owner might consider simply monitoring to see if the infringer’s use expands. This can be cost effective, although it does create the risks that the infringer may be less inclined to change its mark the longer it has been in use and that courts might be less sympathetic to a trademark plaintiff that waited to enforce its rights. The Taco John’s-Taco Chon battle is off and running in the court of public opinion, but the court process is just beginning. Only after the strength of Taco John’s claims is evaluated in court will it be possible to assess whether Taco John’s overreached to bully a small business owner, or whether Taco Chon’s is unfairly trading off of Taco John’s name. Disclosure: Dorsey & Whitney LLP was involved in assigning one of the trademark registrations asserted in Taco John’s lawsuit in the 1980s.

Image from Evan El-Amin / Shutterstock.com During the 2016 presidential primaries, then presidential candidates Donald Trump and Senator Marco Rubio exchanged insults, with Trump calling Rubio “Little Marco” and Rubio commenting on the size of Trumps hands. Recently, this exchange was the basis for a Federal Circuit decision reversing a refusal to register the trademark TRUMP TOO SMALL as an unconstitutional restriction of speech under the First Amendment. In 2018, Steve Elster applied to register the mark for use on T-shirts and related apparel. As the Federal Circuit recounts, “According to Elster’s registration request, the phrase he sought to trademark invokes a memorable exchange between President Trump and Senator Marco Rubio . . . and ‘aims to ‘convey[] that some features of President Trump and his policies are diminutive.’” The Examining Attorney at the United States Patent and Trademark Office denied Mr. Elster’s application under Sections 2(a) and 2(c) of the Lanham Act. On appeal to the Trademark Trial and Appeal Board (“TTAB”), the TTAB affirmed the refusal of the application, relying solely on Section 2(c) of the Lanham Act. Section 2(c) of the Lanham Act prohibits registration of a trademark that: “Consists of or comprises a name, portrait or signature identifying a particular living individual except by his written consent.” 15 U.S.C. § 1052(c). Section 2(c) does not prohibit all uses of an individual’s name in a trademark. Rather, it applies only when: (1) the public would reasonably assume that the goods associated with the mark are connected with the particular individual due to the individual’s fame or recognition; or (2) the individual is publicly connected with the business in which the mark is, or will be, used. There was no dispute that President Trump is sufficiently famous to fall within the protection of Section 2(c) “not only because of his political office but also because of his prior celebrity.” Elster argued that refusing to register the TRUMP TOO SMALL trademark violated his right to free speech under the First Amendment. The TTAB noted that as an administrative tribunal, it does not have the authority to strike down any statute as unconstitutional, but noted that a constitutional challenge may involve “many threshold questions . . . to which the [agency] can apply its expertise”, and went on to find that the refusal to register TRUMP TOO SMALL was not unconstitutional. The TTAB first opined that Section 2(c), like all of Section 2 of the Lanham Act, merely sets forth criteria for obtaining a federal trademark registration. It does not control the use of the trademark. Indeed, one can use a trademark in commerce without obtaining a registration and Elster could do so here even if the registration is denied. Second, the TTAB found that Section 2(c) does not restrict any particular type of speech, but applies in “an objective, straightforward way to any proposed mark that consists of or comprises the name of a particular living individual, regardless of the viewpoint conveyed by the proposed mark.” Accordingly, the TTAB affirmed the Examiner’s refusal to register TRUMP TOO SMALL. On appeal, the Federal Circuit reversed the TTAB, finding that Section 2(c) is unconstitutional as applied to the TRUMP TOO SMALL trademark, while deferring any decision on whether it is unconstitutional in all cases. The Court noted that trademarks can be protected speech and that denying registration, while not prohibiting use of the trademark, “chills speech” by stripping the mark of the many advantages associated with federal registration. Accordingly, there must be a substantial government interest to justify restricting speech by denying a registration. The purpose of the Section 2(c) is to protect state law rights of privacy and publicity that individuals have in their names, appearance, and likeness. The Court quickly found that a right of privacy cannot shield a public official from comment or criticism. The Court also questioned whether a political figure maintains a right of publicity at all. At the very least, the political figure’s right of publicity would not permit a prohibition on the distribution of posters, buttons, apparel, or other materials that express support for or disagreement with the political figure. In short, “[a]s a result of the President’s status as a public official and because Elster’s mark communicates his disagreement with and criticism of the then-President’s approach to governance, the government has no interest in disadvantaging Elster’s speech.” As we reported previously, the Supreme Court has found that portions of Section 2(a) of the Lanham Act, which prohibit the registration of “immoral, deceptive, or scandalous” trademarks and trademarks “which may disparage . . . any persons, living or dead” are unconstitutional. While this opinion expands the Supreme Court’s reasoning to Section 2(c), whether its reasoning applies to trademarks that do not involve political figures or that do not criticize famous individuals remains to be seen. The Federal Circuit noted that it was only asked to analyze Section 2(c) as applied to Elster’s mark. But it did go on to note that Section 2(c) may be “impermissibly overbroad” because it does not leave the USPTO discretion to permit registration for marks that advance First Amendment interests.

In our last post on extraterritorial injunctions, we examined a recent decision from Hong Kong and how a brand owner was able to successfully enjoin infringers in mainland China. We will now look at a recent case in the U.S. and how the brand owner was able to reach conduct in Europe. From U.S. to Europe The U.S. Court of Appeals for the Tenth Circuit most recently weighed in on extraterritorial rights to an injunction under the Lanham Act in Hetronic Internat’l, Inc. v. Hetronic Germany GmbH.  In Hetronic, the plaintiff sued its former European partners operating in Germany and Central Eastern Europe collecting damages in the amount of $113 million for infringing products sold abroad and diversion of sales from U.S. based customers. The Tenth Circuit more clearly defined the reach of the Lanham Act, adopting the framework of the First Circuit’s ruling in the case McBee v. Delica Co., 417 F.3d 107 (1st Cir. 2005), as follows: (i) If the defendant is a U.S. citizen, then a Lanham Act cause of action may be brought against the defendant based on their actions in a foreign country; or (ii) If the defendant is foreign, the Lanham Act applies if: (1) the infringement has a substantial effect on U.S. commerce (note this “substantial effect” requirement is not observed in all U.S. Circuits—see the Hetronic case for a rundown of which Circuit Courts require that the activities have a substantial effect and which merely require “some effect”); and (2) the action would not create a conflict with trademark rights established under the relevant foreign law. In Hetronic, the foreign defendants’ conduct was shown to have a substantial effect on U.S. commerce; however, the injunction was held improperly broad because it covered the world instead of being limited to where the plaintiff had marketed and sold its products. The case was remanded to more clearly define the scope of the injunction to include countries where the plaintiff had already penetrated the market. A Round-Up Across the Seas As we have outlined in this two part post, both Hong Kong and U.S. laws allow for some redress to obtain an extraterritorial injunction against overseas infringing activities. Note, however, that to exercise its discretion to grant such injunction, the Hong Kong court must have personal jurisdiction over the defendants (which is usually shown by the defendants being a Hong Kong resident or a company incorporated in Hong Kong). This is narrower than the U.S. position where it is possible to obtain an injunction under the U.S.’s Lanham Act against a foreign defendant finding personal jurisdiction under Federal Rule of Civil Procedure 4(k)(2), where serving a summons or filing a waiver of service establishes personal jurisdiction over a foreign defendant if (A) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and (B) exercising jurisdiction is consistent with the United States Constitution and laws. That being said, subject to future applications for extraterritorial injunction made before the Hong Kong court, the Court may further determine whether other factors such as the presence of an office or business operation in Hong Kong by the foreign defendant, or a substantial effect of the defendant’s infringing activities on the Plaintiff’s business in Hong Kong may establish the Court’s personal jurisdiction over foreign defendants.

Foreign brand owners whose brands are being infringed in other countries may have an avenue to pursue extraterritorial injunctions. In this two part post, we examine how two courts: one in Hong Kong and the other in the U.S. have recently ruled to enforce injunctions against trademark infringers in Mainland China and Europe, respectively. From Hong Kong to Mainland China The High Court of Hong Kong recently discussed whether the court has jurisdiction to grant an interlocutory injunction with extra-territorial effect in respect of infringement of IP rights. In BIOZEAL, LLC AND ANOTHER v. NATURE’S STORY CO LTD AND ANOTHER [2021] HKCFI 3137, the plaintiffs (which are based in the U.S.) sought injunctions to restrain the defendants (which are Hong Kong companies affiliated with the plaintiffs’ former distributor) from operating flagship stores on certain e-commerce platforms and marketing products to consumers in Mainland China by reference to the plaintiffs’ marks. In that case, Mr. Justice Lok, the judge in charge of the Intellectual Property List of the High Court of Hong Kong, clarifies that the “double actionability rule” (which has largely been abolished in English law) still applies under Hong Kong law in respect of infringement of IP rights. By this rule, the Court will hear an action involving an alleged infringement committed outside the jurisdiction if the infringement is actionable under both Hong Kong law and also the law of the country where the infringement took place. Mr. Justice Lok provided a useful summary of the relevant principles for global brand owners, including U.S. companies, to apply for injunctions to stop passing-off activities outside jurisdiction. Essentially, (i) In so far as a claim for infringement of intellectual property rights outside jurisdiction is concerned, the law is treating passing-off (and injurious falsehood) differently from other types of intellectual property rights such as patents and registered trademarks (where separate registration of the claimant’s right in that jurisdiction is required). (ii) To sue the defendant from committing passing-off outside jurisdiction, the court must have personal jurisdiction over the defendant (usually by showing that the defendant is a Hong Kong resident or a company incorporated in Hong Kong). (iii) The claimant can formulate the claim in either or both of the following manners: (a) the defendant is trying to export an instrument of deception (the most usual case being using Hong Kong “shadow” company with the name incorporating the claimant’s trademark to carry on business outside Hong Kong including granting licences to others to use the relevant trademark) with a view to deceive the public and consumers outside Hong Kong; (b) the defendant’s passing-off activities are also actionable in the foreign jurisdiction concerned. (iv) In the case of (b) above, the claimant would have to produce evidence of the relevant foreign law to prove that the defendant’s passing-off activities are also actionable under the law of that jurisdiction. Since the Hong Kong court has personal jurisdiction over the defendants in that case (due to the fact that the defendants are incorporated in Hong Kong) and the plaintiffs have established good arguable case that the defendants have committed passing-off actionable in Hong Kong and that the plaintiffs will probably suffer enormous irreparable damage caused by the continuous acts of the defendants, Mr. Justice Lok granted injunctions in that case restraining the defendants (but not the plaintiffs’ former distributor based in China that the Hong Kong court does not have personal jurisdiction) from committing the wrongful acts in Mainland China. The defendants have been granted leave to appeal the interlocutory injunctions to the Hong Kong Court of Appeal but their application to stay the execution of the interlocutory injunctions pending the appeal was dismissed. This is the first successful injunction in Hong Kong concerning a cross-border e-commerce platform based on the double actionability rule, allowing the Hong Kong court to take into consideration torts committed by the defendants outside of Hong Kong. It is quite common for infringers in China to use a front company in Hong Kong (i.e. “shadow companies” as discussed above) to facilitate illicit activities in China. This recent Hong Kong court decision should be welcomed by foreign brand owners as it is now clarified that it is possible to use the Hong Kong court as an avenue to pursue legal actions against infringing activities in Mainland China. Stayed tuned for the second part of this post where we will examine the extraterritorial reach of trademark injunctions from U.S. to Europe.

China has been speeding up its legislative efforts in protecting trademark rights and improving its trademark administration. In 2021, China issued a number of new rules and regulations on trademark practice. Here is a quick summary of some important legal and practical updates from the past year that foreign brand owners and foreign trademark practitioners need to know: Detailed Rules Against Bad Faith Filings – The China National Intellectual Property Administration (the “CNIPA”) recently updated its Trademark Examination and Review Standards (the “New Standards”). Significant legal and practice changes have been introduced by the New Standards, which became effective on January 1, 2022. One of the most interesting changes is that the New Standards provide detailed rules and guidelines against bad faith filings not for purpose of genuine commercial use under Article 4 of the Chinese Trademark Law. These detailed rules and guidelines are very useful to the examiners the Chinese Trademark Office (“TMO”) in identifying and refusing bad faith filings in trademark examination, as well as to brand owners in combatting pirate trademark filings in oppositions and invalidations. We first blogged about this change to the law in 2019. Prior Use in China Requirement Relaxed – Another important change for foreign brand owners is that the New Standards no longer require that the “prior use” in relation to the opposition and invalidation grounds for protection of prior-used mark rights under Article 32 of the Chinese Trademark Law has to be “prior use in China”. The New Standards now only requires a brand owner to show that the influence of its prior use (which can be foreign use) has extended to China. Update Your Registrations Details or Face Cancellation – In late December 2021, the CNIPA issued its new Guidelines On Assessing General Violation of Trademarks. One of the important changes introduced by this new Guidelines is that failure to update/record the changes of the registration particulars, such as change of name and registered address of the registrant, among other things, will be deemed an act of “self-alteration” of trademark registration particulars which may attract administrative correction order. The New Standards mentioned above provides similar obligations on trademark registrants in keeping their registration particulars up-to-date. The New Standards further provides that if a registrant fails to comply with a correction order to update its trademark particulars, the relevant registration will be cancelled. Let’s Go Faster – Pursuant to a notice issued by the CNIPA in May 2021 which requires the examiners of the TMO and CNIPA to shorten the process of trademark prosecution, trademark practitioners have seen that by the end of 2021, the average time for trademark examination has been shortened to 4 months, and the average time required for completing a trademark registration has been reduced by 1 month from 8 months to 7 months accordingly. The time frame for assignment recordal, opposition, review of rejection and invalidation have also been shortened to 1.5 months, 12 months, 5.5 months and 9 months respectively. No More Paper – Starting January 1, 2022, the TMO would no longer issue registration certificates in paper form.

image by fitzcrittle / Shutterstock.com There have been massive changes in American collegiate sports since this past summer: On June 30, 2021, the National Collegiate Athletic Association (“NCAA”) radically changed course and announced that it would no longer penalize student athletes who profit off of their name, image, and likeness (“NIL”). As the clock struck midnight on the day the change became official, high profile collegiate stars began announcing sponsorship deals and trademark filings, including debuting personal logos. “Amateurism” has long been the NCAA’s credo, and it spent decades fighting to ensure that student-athletes received nothing more than the cost of attending college. After a group of athletes sued the NCAA alleging antitrust violations, the Supreme Court ruled in June that the NCAA could not prevent student-athletes from receiving some education-related benefits and payments. Although the ruling in Alston was relatively modest, some saw the unanimous 9-0 decision and Justice Kavanaugh’s “blistering concurring opinion” (“[t]he NCAA is not above the law,” and its “business model would be flatly illegal in almost any industry in America”) as setting the stage for a much bigger fight to come regarding the NCAA’s monopoly power. Although the decision did not directly address payments for NIL, in light of the decision, years of increasing pressure, and a wave of new—and highly variable—state laws permitting payments for NIL, the NCAA adopted its interim NIL policy. The policy, which applies to Division I, Division II, and Division III schools, allowed athletes immediately to “benefit from their name, image and likeness” and provided that students could engage in NIL activities that are consistent with the law of the state where their school is located. Athletes attending school in a state without a specific NIL law are also allowed to engage in NIL activities without incurring NCAA violations. The policy still prohibits “pay-for-play” and “improper inducements” to attract athletes to a particular school. The interim policy also allows for athletes to receive professional representation in NIL deals. While the NCAA scrambles to craft a cohesive and permanent solution, schools and their compliance departments have been scrambling to craft their own NIL policies and programs in order to provide clear guidance to their athletes to help them avoid violations while also helping them maximize their potential earnings. A host of potential intellectual property rights issues could be brewing: for example, superstar University of Connecticut basketball player Paige “Buckets” Bueckers, who signed a watershed deal with Gatorade soon after the new policy went into effect, applied to register a trademark in her nickname PAIGE BUCKETS on July 13, 2021. How does her school promote her and avoid infringing on that trademark? Can they license the mark for their own use? If they do, would that qualify as pay-for-play? Do her sponsors risk infringement when using images of her in school apparel (especially if that includes the school’s sponsors’ logos), or vice versa? What if an athlete signs an endorsement deal that conflicts with a school’s official sponsor? Although highly marketable athletes like Bueckers are smart to move quickly to protect their NIL, athletes will need guidance to ensure they can take advantage of the policy without infringing on intellectual property rights, violating school or NCAA rules, or entering into unfavorable, even exploitative, deals. Especially for athletes making significant sums, education and guidance on tax and other financial planning will be critical as well. While some collegiate stars are cashing in and signing high profile, large-dollar deals, thus far, most deals thus far have been modest, allowing less well-known athletes to make modest sums by hosting clinics or endorsing local businesses. Though the stakes may be smaller, these athletes will also need guidance on how to protect their NIL while avoiding any potential IP rights violations. At least two schools are already under investigation for potentially violating the policy. BYU partnered with protein bar maker Built in a deal that provided compensation to each member of its football team, while the University of Miami partnered with a gym that would provide compensation to football team members. Navigating the variety of state laws and the sure-to-be frequently evolving school-specific rules and policies is bound to be complex. Practitioners advising schools and individual athletes should be sure to carefully monitor changing rules and laws, especially as Congress considers wading in, and to advise student athletes on the long-term ramifications of their deals, whether that be IP rights issues, unexpected tax consequences, or ensuring that athletes properly vet both the contracts they are signing and the companies they endorse.

Image from Ververidis Vasilis / Shutterstock.com We previously wrote about a series of trademark lawsuits filed by NBA MVP and now NBA champion Giannis Antetokounmpo over the use of his nickname “Greek Freak”. Those lawsuits all contained similar allegations: that the defendants sold merchandise online bearing Antetokounmpo’s name, nickname and/or likeness, including Antetokounmpo’s trademarked GREEK FREAK. While those cases all appear to have settled, one similar SDNY case that was filed after our prior blog post did not. In that case, Antetokounmpo v. Paleo Productions LLC et al. (No. 1:20-cv-6224), Antetokounmpo alleged that the defendants were selling their GREEK FREAK spice blend on the internet in violation of Antetokounmpo’s registered GREAK FREAK mark. After defendants failed to answer the complaint, Antetokounmpo obtained a default judgment and Judge Koeltl referred the case to Magistrate Judge Lehrburger for an inquest on damages. This is where things got interesting—at least for us trademark lawyers. Antetokounmpo sought statutory damages, legal fees and costs, as well as a permanent injunction against the defendants. After receiving submissions from Antetokounmpo, the Magistrate Judge found the defendants liable for trademark infringement, awarded Antetokounmpo his legal fees and costs, and issued a permanent injunction against the defendants. However, the Magistrate Judge denied Antetokounmpo’s request for statutory damages. Antetokounmpo appealed that ruling to Judge Koeltl, who reviewed the issues de novo. Unfortunately for Antetokounmpo, Judge Koeltl agreed with the Magistrate Judge and denied Antetokounmpo’s request for statutory damages. Under the Lanham Act, statutory damages are only available in cases “involving the use of a counterfeit mark.” A counterfeit mark is, essentially, a mark that suggests a fake origin. After an exhaustive analysis, the court found that this was not a case that involved the use of a counterfeit mark for two independent reasons. First, the court found it implausible that a reasonable consumer would think that the GREEK FREAK spice blend was from Antetokounmpo since he had never used his mark in connection with food, let alone spices. To qualify as a counterfeit, the mark must be used on the “same goods or services for which the trademark is registered.” Because Antetokounmpo had not previously used his GREEK FREAK mark in connection with spices, the court ruled against him. Second, the court found that the defendants had not even used GREEK FREAK as a “mark” under the Lanham Act because they did not use it to “communicate origin,” but instead to describe a flavor (the company who made the spices was clearly identified on the label). On that basis, the court held that the defendants’ use of GREAK FREEK “did not deceptively suggest an erroneous origin because it does not suggest an origin at all.” While Antetokounmpo’s winning streak continues both in court and on the court, his victory in the Paleo case was not a complete slam dunk.

Just in time for the holidays, the U.S. District Court for the Western District of Kentucky issued a decision steeped in two rich holiday traditions—family lore and alcohol. On December 16, 2021, the court entered a preliminary injunction against Log Still Distilling, LLC in a trademark infringement and unfair competition action brought earlier this year by Heaven Hill Distilleries, Inc., both manufacturers of bourbon. Heaven Hill is a large family-owned distillery founded in Louisville, Kentucky in 1935. Log Still was founded in 2018 as a new distillery, line of spirits, and tourist destination in Gethsmane, Kentucky. Bourbon is a distilled liquor made primarily from corn that Congress has designated a distinctive product of the United States. The story of how Heaven Hill and Log Still arrived in a trademark battle in federal court begins with Joseph Washington “J.W.” Dant, who first distilled bourbon as a teenager in 1836. J.W. Dant’s unique distilling method entailed running a copper pipe through a hollow poplar log, filling the pipe with fermented mash, and passing steam through the pipe. The resulting liquor became J.W. Dant-branded bourbon whiskey. Dant’s namesake distillery continued producing J.W. Dant whiskey after Dant’s death in 1902, and after Prohibition obtained two federally registered trademarks (U.S. Reg. Nos. 320,981 and 376,057): The distillery and the marks changed hands several times in the mid-20th century, ending in Heaven Hill buying the J.W. Dant brand (among others) in 1993. Today, J.W. Dant bourbon is available for $15 to $18 on the bottom shelf of liquor stores in most states. (J.W. Dant is also for sale on the Internet, where no one knows you’re a bottom shelf liquor.) Meanwhile in Gethsmane, J.W.’s great-great-great-grandson John Wallace “Wally” Dant III and some of his cousins founded Log Still to “revive” their family’s place in the bourbon business. Wally initially approached Heaven Hill about buying the J.W. Dant brand, but Heaven Hill declined. Undaunted, Log Still launched its Monk’s Road-branded bourbon and sought to infuse its promotion with the family’s history and, according to Log Still’s internal marketing documents, create “ties to the J.W. Dant name whether the brand can be used or not.” These ties begin with the Log Still Distilling name, which evokes J.W. Dant’s original method of distilling bourbon by pouring it through a hollowed log. Log Still went further—naming its distillery “Dant Crossing” and billing its brand as the “rebirth of the J.W. Dant legacy” among other homages to the family’s famous ancestor. In response to Log Still’s social media posts containing these themes, Heaven Hill sent cease-and-desist letters. Heaven Hill also opposed Log Still’s attempt to federally register a “Dant & Head” trademark, and ultimately filed suit. In granting Heaven Hill’s request for a preliminary injunction, the court found persuasive proof that Log Still had crossed from recounting family lore to build a new brand into impermissibly leveraging an old brand that Log Still did not own. In its 58-page decision, the court catalogued Log Still’s marketing strategies and advertising themes to conclude that this was “an affiliation case in which a newcomer is building a brand by intentionally tying itself to an old brand and story controlled by a competitor.” Throughout, Log Still’s marketing strategy invoked themes of “reviving a legacy,” “heritage revived,” and “reviving the Legacy one barrel at a time.” Log Still acquired the domain name JWDant.com and, for a time, directed traffic to Log Still’s website. That website described the “heritage” and “Dant Legacy” Log Still claimed to be reviving and that Log Still’s “story … begins with our forefather Joseph Washington Dant,” who “gave birth to the Dant family’s place in bourbon lore with a legacy all our own.” Log Still declared on social media that “we’re the Dant family … and we’re back in the bourbon business.” A few posts even featured old photos that included the trademarked J.W. Dant logo and bottles. As the court observed, this public story of revival is not accurate—the J.W. Dant brand had existed all along. And Log Still was keenly aware of the existing J.W. Dant brand. Log Still’s internal marketing plans described its strategy to “subtly” tie is branding to that of J.W. Dant. Log Still’s documents described J.W. Dant as one of Log Still’s “competitors,” and stated that there was “possible confusion” between the brands, which Log Still and its marketing team predicted could lead to “threats” such as “legal challenges” from Heaven Hill. Although not knock-offs, the court decided that Log Still’s logos appear influenced or inspired by the J.W. Dant marks. Log Still’s Monk’s Road bourbon displays the tagline “[t]his is a story of heritage & revival” and state that “Joseph Washington Dant started this tradition way back in 1836 when he felled a poplar tree.” Log Still’s label also featured a crest with an establishment date of 1836 that was definitely not applicable to Log Still’s founding. Log Still took a similar approach to branding its 350-acre campus by highlighting the land’s history to the Dant family. Visitors are greeted by a story board discusses the history of J.W. Dant and Log Still, and the tasting room is walled by barrels stenciled with “The Dant Distillery Company,” a common-law trademark registered to Heaven Hill. Even if some of these statements—when read narrowly—merely referred to J.W. Dant’s history and not the competing bourbon sold today, the court concluded that together, Log Still’s story “indicates that Log Still’s principal motivation is to sell its competing spirits and tourist offerings—not simply to reminisce about family history.” All of this led the court to conclude that Log Still was using the J.W. Dant name in a manner likely to cause consumers to be confused about the (lack of) a relationship between the two brands. The court began its analysis with two threshold issues: First, whether Heaven Hill had valid protectable rights. On this issue, Log Still argued that Heaven Hill had “allowed the quality and sales of J.W. Dant to fall so far that the brand has lost its associated goodwill, leaving nothing for other users to infringe.” This argument was rejected as lacking in in any legal basis, as the mark was not abandoned and did not have to be a thriving enterprise to be protected from infringement. Second, the court determined that Log Still was using the J.W. Dant marks and indicia of good will as a source identifier, brushing aside Log Still’s “descriptive use” defense. Log Still was not referencing the J.W. Dant name and legacy in an academic non-trademark manner; rather, it was drawing on the J.W. Dant legacy to sell commercial products. Log Still also failed another test for good-faith, non-trademark use—the court decided that the story Log Still was selling was not true. In particular, Log Still’s attempts to trace its history to 1836 merely co-opted the Dant Distillery Company’s story, a legacy the Dant family sold long ago and that Heaven Hill purchased in 1993. The court applied the familiar likelihood of confusion analysis following the Sixth Circuit’s Frisch’s test. Most difficult for Log Still’s defense was the evidence of actual confusion. Internet users commented in response to Log Still’s posts: “is that J W Dant I used to drink” and “What about JW Dant is that coming back?” A local news station broadcasted an interview with Wally (whom they introduced as “J.W.”) Dant while displaying a bottle of Heaven Hill’s J.W. Dant product and barrels labeled Dant Distillery. A distillery-focused blog reported on the opening of Log Still’s distillery with the headline “Log Still (formerly J.W. Dant).” The court also emphasized Log Still’s intent in selecting its competing branding. The court quoted from Log Still’s internal marketing documents which made “clear that Log Still aimed to steal J.W. Dant’s story—intentionally and in order to compete in the spirits marketplace.” As the court colorfully put it, the Marketing Plan was “legally damning” and “as close as many lawyers will ever come to a smoking gun”. Then the court added, “But wait, there’s more!” in recounting even further evidence of bad faith intent by Log Still to exploit another company’s goodwill. Given its conclusion that Heaven Hill was likely to prevail, the court wasted no time in enjoining Log Still’s continued infringement. The court applied the Trademark Modernization Act of 2020’s presumption of irreparable harm and determined that Log Still had not adequately rebutted this presumption by attempting to rely on lack of provable economic damage to Heaven Hill, concluding that irreparable harm could be established by loss of control over brand image and good will. The court ordered Log Still to take several actions to distinguish itself from the J.W. Dant brand. The court ordered Log Still to remove references to J.W. Dant, his story, and the year 1836 from its products, labels, and logos. The court also enjoined Log Still from using jwdant.com domain in connection with the spirits industry and required Log Still to remove any internet marketing that states or implies “that Log Still is reviving, preserving, or contributing to the legacy of J.W. Dant’s distilling and the company he founded and his descendants sold.” The court stopped short of ordering Log Still to remove all references to the history of J.W. Dant and his connection to Log Still’s owners from its marketing and distillery tours, but Log Still is required to display a conspicuous disclaimer disavowing a connection to the J.W. Dant brand. The court’s decision is a warning to distant descendants of the founders of famous brands about attempting to cash in on a family legacy that another entity owns. On the issue of whether an individual has an unqualified right to use his or her own name in marketing a product, the answer today is “no.” As the court pointed out, “A century ago,” Log Still’s principal J.W. (Wally) Dant “may have had a stronger case to sell bourbon by using his ancestor’s name or the initials they share. 19th century courts recognized a ‘sacred right’ to use one’s own name as a mark, even if someone else used the name first.” But this doctrine changed as courts eventually recognized “that names could confuse as easily as any other trademark.” But there is a broader lesson for those without a whiskey baron in the family tree. The evidence against Log Still that the court found most compelling was Log Still’s internal marketing documents confirming Log Still’s desire to “creat[e] direct ties to” Heaven Hill’s mark “whether the brand can be used or not.” The strategy described in these documents is exactly what trademark and unfair competition law is designed to prevent—a new brand capitalizing on an old one by tying the two in the consumer’s mind. Upstart brand builders should be mindful that trademark law bars more than copying a name, it protects the goodwill built in a brand’s identity. Efforts to trade on the goodwill of another, even “subtly,” can land the junior user in hot water.

There are two sure-fire ways to maximize the chances that a consumer survey gets bounced out of federal court: (1) surveying the wrong people; and (2) leading them to a desired “correct” answer. Both of these survey maladies were on display in a dispute pending before the U.S. District Court for the Northern District of California in Kudos Inc. v. Kudoboard, LLC. The Court’s recent Daubert order tells a cautionary tale that trial counsel and their experts should be mindful of as they work together in designing a consumer survey for use in a Lanham Act case. The Dispute Plaintiff operates an internet-based software communication platform that enables users to exchange feedback and recognition with other users and owns registered trademarks for “Kudos” that cover these services. Defendant operates an online greeting card company where consumers can create and send digital or printed greeting cards. Defendant’s service is branded “Kudoboard,” for which Defendant also owns a registered mark covering “a website allowing users to create customized online group greeting cards.” Plaintiff sued for infringement; Defendant asserted a number of affirmative defenses. The Survey Plaintiff offered a consumer survey to show that consumers are likely to be confused by Defendant’s use of “Kudoboard.” But Plaintiff’s survey contained two fatal flaws, both of which independently supported the Court’s decision to exclude the survey from evidence. For starters, Plaintiff selected an “under-inclusive” universe of potential survey respondents. Because Plaintiff alleged claims for forward confusion premised on the theory that consumers of Defendant’s services will believe the services originate with or are affiliated in some way with Plaintiff (as opposed to reverse confusion), the proper survey universe is the purchasers of the Defendant’s services (the junior user in the dispute). Here, Plaintiff’s expert surveyed the wrong respondents. Instead of focusing on purchasers of Defendant’s e-greeting card services, the survey universe (or population) was composed “exclusively” of “current users of employee recognition software” – a universe that focused on the Plaintiff’s customer base. While some of these individuals may have also used Defendant’s e-greeting card services, large swaths of potential users were excluded, including “educators, community groups, and casual users.” Thus, as the Court observed, the survey universe was “under-inclusive in that it excluded otherwise qualified consumers, arguably some of the most likely consumers to have knowledge of the products at issue.” For this reason alone, the Court ruled the survey was inadmissible. Further, according to the Court, the survey deployed some “leading” language before respondents were shown the various webpage stimuli (which included Defendant’s website). After being shown Plaintiff’s website (with the Kudos mark), participants were shown three other websites (one of which was Defendant’s), each with text categorizing the products as “employee recognition software products” or “employee engagement software.” The Court said this “statement constitutes a lead-in that departs from simulated market conditions by substantively describing the products that followed.” For this independent reason, the Court excluded the survey. The Conclusion Here are three key take-aways from this decision: While some flaws in a consumer survey go to the “weight” of that evidence, an improperly defined survey universe or a leading survey instrument can affect the survey’s admissibility in the first instance. Selecting the correct survey universe is an absolute must. Trial counsel and their experts need to lock in on this issue and make sure they are on the same page in terms of whose opinions are relevant based on the legal claims at issue. Any survey stimuli should be presented to respondents without any additional frills or superfluous information that might bias or prime them. There is a meaningful difference between providing respondents with information to help them complete a survey (for example, indicating that they can “zoom in” to make a stimulus larger on the screen), and providing them with substantive information that “plants a seed” as to how they should answer a question or how they should “perceive” the services at issue. If you want the Court (and your client!) to give your survey kudos, make sure you avoid these rather sizable pitfalls along the way.

A recent Uniform Domain Name Dispute Resolution Policy (“UDRP”) decision provided long-awaited guidance for challenging .SUCKS domain names. Sanofi v. Privacy Hero Inc./Honey Salt, ltd, which was decided by a three arbitrator panel of the World Intellectual Property Office (“WIPO”), was the first in a line of decisions to hold that use of the generic top-level domain (“gTLD”) .SUCKS in combination with another party’s trademark can be confusingly similar, and thus, can infringe the trademark holder’s rights. Given the unique circumstances of these cases, however, trademark owners should not count on future panels applying the results of these decisions broadly. Why It .Sucks to be Honey Salt. While the Respondent, Honey Salt, Inc. claimed its site was an open forum for the public to discuss complaints protected under the First Amendment, the Panel instead agreed with Complainant that because the complaints were anonymous and undated and did not mention Complainant by name, they were more likely to be a pretext for Respondent’s real purpose for the site than they were to be protected speech. Based on the existence of multiple links to third-party sites from the website and Respondent’s admission that the sanofi.sucks domain name was for sale, the Panel instead found Respondent’s real purpose for the site was to drive traffic to the site and raise the purchase price for the underlying domain name. Given these circumstances, the Panel ordered sanofi.sucks to be transferred to Complainant. To succeed in a UDRP, the Complainant must pass this three-pronged test: The manner in which the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; Why the respondent should be considered as having no rights or legitimate interests regarding the domain name subject of the complaint; and Why the domain name should be considered as having been registered and used in bad faith. For the first prong, the Respondent argued that the domain name was not identical or confusingly similar to the SANOFI trademark because “.sucks” is pejorative, clarifying that the website was not affiliated with the Complainant, but instead contained criticism protected by free speech. The panel rejected this argument, concluding the domain name incorporated the registered SANOFI trademark in its entirety and merely added to it the generic “.sucks” gTLD. The panel did not find this addition precluded a finding of confusing similarity. For the second prong, the Respondent asserted that it had rights or legitimate interests in the domain name because it was used to host a criticism website allowing users to exercise their free speech rights. After noting that the Respondent was a third party with no direct relationship with any person who might have a genuine gripe, the Panel accepted Complainant’s contention that the supposed complaints were unverified and general and likely a pretense to create the impression that the registration and use of the domain name were legitimate. The Panel also agreed with Complainant’s argument that the actual intent is more likely to increase the price it could receive from the sale of the disputed domain name. For the third and final prong, the Respondent denied that it used the domain name in bad faith because of the legitimate purpose of providing an open forum for the free exchange of criticism. Respondent added that allowing brand owners to claim bad faith merely because a domain name is not associated with the underlying brand would undermine the purpose of the .sucks gTLD for criticism and commentary. Here too the Panel agreed with the Complainant and ruled that the domain name was registered in bad faith because it was part of the Respondent’s intention to take unfair advantage of the Complainant’s trademark by increasing Internet traffic to the associated website and to other websites owned by the Respondent using the .SUCKS domain name. The Respondent admitted that it had put many domain names with .SUCKS domain names on the market. The Panel also noted that the Respondent’s pattern of abusive registrations supported a finding of bad faith. The Panel ordered that the domain name be transferred to the Complainant. Rubbing Salt in the Proverbial Wound. Since the decision was issued, WIPO has followed suit and has ordered domain name transfers or cancellations in thirteen other cases. See, e.g., Digicel Caribbean v. Domains By Proxy, LLC / Jamie Mcullan; Alsace Croisieres SA v. John Livingstone / Write Place Publications Inc.; and FirstMerit Corporation v. Registration Private, DomainsByProxy.com / Jon Murrell. All the domain names were owned by Honey Salt on behalf of Everything.Sucks for similar websites. Because of this, trademark owners may wish to determine if Honey Salt or other platforms with a similar business model have acquired their marks as part of .SUCKS domain names. Given the number of transfers, and pending cases for .SUCKS domain names, now may be a sweet time to rub more salt in the Honey Salt .SUCKS wound. Limits on How this Decision .Sucks. The Sanofi panel was careful to distinguish this case from prior decisions where the websites in question contained genuine criticism targeted at specific trademark owners and were not selling anything, including the domain name itself, or otherwise trying to achieve commercial gain. In such cases, panels have typically rejected complaints on the grounds they did not establish the second prong (no legitimate interest in the domain name) or the third prong (that the domain name was registered in bad faith) needed to prevail in a UDRP. The Sanofi decision does not call into question these precedents. Thus, while it .SUCKS to be Honey Salt, trademark owners should not count on future panels ruling that it .SUCKS to operate a genuine gripe site.

What first started as a meme featuring a fluffy dog with poor grammar has now resulted in a trademark fight over the ownership of an estimated $80 billion brand. If the progression of this Internet sensation has left your head spinning, you are certainly not alone. Its history is as much a rollercoaster as its cryptocurrency value. Back in 2013, the now infamous meme, featuring a lovable Shiba Inu dog named Kabosu whose inner monologue was riddled with grammatical and spelling errors, went viral and even won “top meme” of the year. Numerous iterations of the “Doge” meme—aptly named after the misspelling of “dog”— have since circulated the Internet, showing the dog in various situations and expressing a typically comical inner monologue replete with contradictions, self-deprecating humor, or other pop-culture references, coupled with the now familiar “doge” style of grammatical faults. Because living in meme-infamy was not enough, in December 2013, software engineers Billy Markus and Jackson Palmer created a new cryptocurrency called “Dogecoin” as a joke in order to poke fun at the wild speculation of other cryptocurrencies. Although intended to be worthless, Dogecoin was designed as a peer-to-peer digital currency that could appeal to a broader demographic than the much larger Bitcoin. When Dogecoin first hit the trading market, it was valued at $0.00026 per coin, but in just 72 hours following its launch, its value jumped nearly 300% to $0.00095 per coin. While the coin’s value fluctuated over the years, much like its cryptocurrency counterparts, it absolutely skyrocketed in January and February of 2021 following encouraging tweets from Tesla-billionaire Elon Musk. In only 24 hours, the coin erupted 800% and was valued at $0.07 per coin. But its unexpected growth only continued throughout the spring of 2021 when the cryptocurrency hit $0.45 per coin on April 16. At the time, the cryptocurrency originally created as a joke was worth nearly $70 billion, making it the fifth-highest valued cryptocurrency. In early May 2021, Dogecoin hit a peak of $0.711 per coin, topping $80 billion. And with this monumental value increase has come the monumental fight over who actually owns the “Dogecoin” brand, and thus, the exclusive rights to use it. Dogecoin’s creators formed a Colorado non-profit in 2014, fittingly named the Dogecoin Foundation, as the owner of the cryptocurrency. However, the Foundation did not file an application for DOGECOIN with the Trademark Office until August 2021. Unfortunately for them, by then nearly half a dozen other applications for DOGECOIN marks were pending with the Trademark Office, each of which is now contending for the rights to exclusively use the DOGECOIN trademark. These applications cover the expected “virtual currency financial services” (U.S. Serial No. 90/686,038) or “cryptocurrency services” (U.S. Serial No. 90/906,631), but also include alleged use with “costumes for use in role-playing games” (U.S. Serial No. 90/720,528) and “covers for smartphones” (U.S. Serial No. 90/625,748). A Dogecoin Foundation board member lamented that, back in 2014, Dogecoin was always intended to be a joke, so they believed it was not worth registering with the USPTO. But with its meteoric rise, others saw an opportunity to monetize the brand beyond cryptocurrency trading. Now the question becomes—who actually owns rights in the trademark? First are the issues of priority and abandonment. The Dogecoin Foundation went defunct for several years following its founding in 2014, and only recently relaunched in August 2021. Whether this is abandonment under the Lanham Act will depend on whether use was discontinued with an intent not to resume such use. But the Foundation has an uphill battle because three years of non-use is prima facie evidence of abandonment. And during the that period of non-use, Cook Islands-based company Moon Rabbit AngoZaibatsu LLC applied for DOGECOIN covering blockchain software goods in Class 9, and virtual currency services in Classes 36, 39, and 42 on an intent-to-use basis. Moon Rabbit’s founder claimed that, because the Dogecoin Foundation had gone dormant, it abandoned its use of the DOGECOIN trademark, and thus, Moon Rabbit’s open-source DOGECOIN code had rights to the mark. But the Dogecoin Foundation claims Moon Rabbit is “attempting to profit unfairly off of the goodwill Dogecoin has built,” to the Foundation’s economic detriment. In addition to Moon Rabbit, the Foundation is seeking to enforce its rights through cease and desist letters against numerous other entities, including Dogecoin 2.0, claiming priority to the trademark. The real legal fights over priority and who can prove exclusive and continuous rights in the trademark will occur when, and if, any of the DOGECOIN applications reach publication or maybe even in federal court. But speaking of publication, it is unclear if any of these applications will reach that stage because the USPTO’s initial take is that DOGECOIN is descriptive. Many of the more recent applications have not yet been assigned to an examining attorney, but the first-filed application, dated February 3, 2021 for the DOGECOIN DEPOT mark, U.S. Serial No. 90/507,747, owned by a Colorado-based individual, may present as both an obstacle to and a warning case for all subsequently-filed applications. On September 2, 2021, the USPTO issued an Office Action requiring a disclaimer of the term DOGECOIN as it applies to financial services, stating that “purchasers who encounter the word DOGECOIN in connection with the identified services would immediately understand that applicant’s credit union services feature borrowing or repaying loans in cryptocurrency.” We will be watching to see if the applicant accepts the disclaimer or tries to fight against it, which could have far reaching implications for the rest of the Dogcoin pack regardless of how the applicant proceeds. In any case, the DOGECOIN DEPOT mark includes the additional term “DEPOT,” which was not part of the disclaimer requirement, so it will likely still be published for registration on the Principal Register, assuming the owner responds to the Office Action. At that point, we will not be surprised to see an opposition filed by the Foundation. What started off as a joke has grown into a very real $80 billion dispute. And while it will likely take quite some time to sort out rights in the trademark, one thing is for sure: this dogfight will certainly provide excellent content for years of doge memes to come.

We have previously written about the trademark dispute between Vortic—a watchmaker that restores antique pocket watches, and converts them into wrist watches—and the venerated Hamilton Watch Company, which produced its first watch in the 1890s and is still in business today. Vortic uses a restored movement (the internal mechanism), face and hands from pocket watches produced by Hamilton to create “The Lancaster” wristwatch, but the other parts are produced by Vortic and the ultimate product is also assembled by Vortic. We previously reported that Judge Alison Nathan of the Southern District of New York had denied Hamilton’s motion for summary judgment and motion for reconsideration, concluding disputes of fact persisted, and that the case at trial would turn on the issue of likelihood of consumer confusion. In addition to considering the standard Polaroid factors, because the alleged infringement related to refurbished goods, Judge Nathan applied a “crucial supplemental factor” from the Supreme Court’s decision in Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 128-31 (1947), whether Vortic provided adequate disclosure of the nature of the watch being sold as a “modified genuine product.” Following a one-day bench trial, Judge Nathan found that Vortic had fully disclosed the watch’s restoration and lack of affiliation with Hamilton (the Champion factor), and then considered the relevant Polaroid factors in concluding there was no likelihood of confusion. Judge Nathan explained that under Champion, “full disclosure” of the identity of the restorer and the used nature of the product protects the seller of second-hand goods. Judge Nathan gave substantial weight to this supplemental “full disclosure” factor under Champion, and while she considered all of the Polaroid factors as well, she noted that only three such factors—actual confusion, defendant’s good faith and sophistication of the buyers—were “indisputably relevant,” and that each of these three factors weighed against finding likelihood of confusion. Hamilton appealed to the Second Circuit Court of Appeals, which affirmed Judge Nathan’s decision earlier this month. While Hamilton challenged the district court’s factual findings and legal analysis, the legal challenge is what is interesting about the appeal. The Second Circuit first agreed that the framework laid out by Champion applied to this dispute, despite Hamilton’s argument that Champion did not apply because the “reconditioning or repair” that went into The Lancaster was so extensive that it was a new watch containing Hamilton parts, not “a modified genuine Hamilton product.” The more interesting part of the Second Circuit’s opinion, however, addressed how the Champion framework interplays with the Polaroid factors. Hamilton argued the district court erred by failing to first determine the likelihood of confusion under the Polaroid factors before turning to the “full disclosure” analysis under Champion, and that similar to an affirmative defense, Vortic (the defendant) bears the burden of establishing the “full disclosure” standard was met. The Second Circuit disagreed, concluding that the district court did not err in declining to require Vortic to prove the effectiveness of its disclosures under Champion. While Vortic did present evidence that its disclosures were effective, the Second Circuit held that because a plaintiff in a trademark infringement action bears the burden of establishing likelihood of consumer confusion, the district court correctly looked to Champion and the disclosures made by Vortic to determine whether Hamilton (the plaintiff) met that burden. Finally, in a trademark case involving refurbished goods, the Second Circuit reaffirmed that courts must consider both Champion and Polaroid in determining whether a plaintiff has met its burden, but that there is no hard and fast order in which a court must undertake that analysis.

In a recent decision, the Ninth Circuit Court of Appeals found that an Australian cosmetic company is subject to the personal jurisdiction of a federal district court in California despite having no traditional “minimum contact” ties to the state of California. The decision relies on Federal Rule of Civil Procedure 4(k)(2), the rarely-invoked rule authorizing courts to exercise nationwide jurisdiction over foreign parties who would not otherwise be subject to jurisdiction in any individual state of the United States. Notably, the Ninth Circuit’s decision largely turned on the Australian company’s marketing on social media—directed to “USA BABES”—and use of U.S.-based influencers. Alya Skin Pty. Ltd. is an Australian beauty and skincare brand known for its “World Famous Pink Clay Mask” shown below. It uses ALYA and ALYA SKIN to market its clay mask and other pink skincare products to customers across the globe. Alya Skin began marketing its products in 2018. Ayla LLC is a California-based beauty brand and retail business. It markets a variety of specialized skin, body, and hair care products, including its own line of AYLA branded products. Ayla owns three U.S. trademark registrations for the mark AYLA covering, among other goods and services, “cosmetics” and “online retail store services in the field of cosmetics and beauty products.” Ayla began using the AYLA mark in 2011. In February 2019, Ayla filed a Complaint in the Northern District of California alleging that Alya Skin’s use of ALYA and ALYA SKIN to market its cosmetic products constitutes trademark infringement, false designation of origin, and unfair competition under federal and California law. Alya Skin responded by filing a motion to dismiss, arguing that it was not subject to personal jurisdiction in the Northern District of California. The district court agreed and dismissed the case. In its decision, the court quickly found that it does not have specific personal jurisdiction over Alya Skin under the traditional “minimum contacts” test of International Shoe and its progeny. There was no dispute that Alya Skin has no retail stores, offices, officers or employees, bank accounts, or property in the United States. The court found that although Alya Skin operates a website accessible in California, it is a “standard, modern website” and the fact that consumers in California could purchase goods from the website is not alone sufficient to confer jurisdiction in the absence of features that specifically target consumers in California. The district court further analyzed the possibility of exercising personal jurisdiction under the “nationwide jurisdiction” provision of Federal Rule 4(k)(2). This infrequently-used provision was added to the Federal Rules of Civil Procedure to allow for the exercise of personal jurisdiction when an action arises under federal law, the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction, and the federal court’s exercise of jurisdiction comports with due process. The due process analysis looks to whether the defendant has sufficient contacts with the United States as a whole, rather than any individual state. The district court weighed Alya Skin’s contacts with the United States and held them to be insufficient, finding that Alya Skin targeted its marketing to an international market rather than to the U.S. On appeal, the Ninth Circuit re-weighed Alya Skin’s contacts with the U.S. Ayla was successful in convincing the appellate court that Alya Skin’s infringing conduct was expressly aimed at the United States, resulting in a reversal of the district court’s decision. According to the Ninth Circuit, the evidence of record showed significant contacts with the United States, including: (1) nearly 10% of Alya Skin’s sales are to U.S.-based customers, a volume the appellate court characterized as “substantial” in the country as a whole that were “regular and significant”; and (2) it uses a distributor in Idaho to fulfill some of its orders, demonstrating that Alya Skin contemplated significant shipments to U.S. customers even though it shipped its products worldwide as well. While these contacts may not alone be sufficient to confer jurisdiction, the Ninth Circuit further found that Alya Skin’s sales in the U.S. were not “random, isolated or fortuitous” or merely placed in the stream of international commerce. Rather, Alya Skin had made an “intentional, explicit appeal” directly to United States consumers, a finding based in large part on Alya Skin’s use of Instagram and Facebook marketing. Social media accounts managed by Alya Skin included information targeted specifically to Americans. The Ninth Circuit’s opinion references one Instagram post on Alya Skin’s account with the caption “Attention USA Babes we now accept afterpay.” And a November 2018 post on Alya Skin’s Facebook page advertising a Black Friday sale. Although Alya Skin presented evidence that “Black Friday is slowly catching on in Australia,” the court noted that Black Friday is an American invention and “remains America’s biggest shopping day.” Apart from these two posts on Alya Skin’s social media accounts, the appellate court further relied on Alya Skin’s use of social media influencers who are based in the U.S. and have a predominantly U.S.-based following to spread awareness of its products and Alya Skin’s advertisement that its products are available for two- to four-day shipping to the U.S. Alya Skin presented evidence that a vast majority of its social media marketing was not directed to the U.S. market. However, the Ninth Circuit found that even though “Alya Skin may have addressed much of its advertising to an international or Australian audience does not alter the jurisdictional effect of marketing targeted specifically to the United States.” Accordingly, the appellate court concluded that personal jurisdiction was proper under the “rarely exercised” Rule 4(k)(2) and reversed the district court’s dismissal of the case.

Like me, Judge Otis D. Wright of the Central District of California remembers KOOL. A once leading menthol cigarette label, KOOL brands and its owner ITG Brands, LLC sued Capna Intellectual claiming Capna’s Bloom Brands’ use of interlocking “OO”s in its marketing of packaged cannabis products infringes on and dilutes the KOOL marks. After a June 7 hearing in which Judge Wright urged the parties to come to an agreement regarding an appropriate preliminary injunction, on June 21 Judge Wright signed ITG’s revised proposed preliminary injunction, which was more limited and prohibited Bloom from using interlocking “OO”s and/or circles in its marketing and promotional materials. This ultimately led to a settlement and stipulated permanent injunction issued earlier this month. While the preliminary and stipulated permanent injunctions are relatively standard form, and are perhaps not noteworthy, a couple points from the parties’ briefing on the preliminary injunction and the hearing are interesting to consider. Based on my own review of the briefing and application of the Sleekcraft likelihood of confusion factors, this case was a close call, and I perhaps would not have issued a preliminary injunction. Bloom Brands’ most interesting argument did not fit neatly into any one of the eight Sleekcraft factors. Bloom Brands juxtaposed the fall of menthol cigarettes as a product, and the consequent falls of brands affiliated with that product, including KOOL, against the mass legalization and rise of cannabis products and brands across the majority of the United States. For example, Bloom argued that KOOL brands and its interlocking “OO”s may have had “a worldwide reputation for quality and authenticity” in the 1930s, but Bloom claimed that in 2021, KOOL’s “reputation is for peddling toxic addictive carcinogens to minorities.” Bloom also argued that on April 29, 2021 the FDA announced that it would ban menthol cigarettes nationwide. By contrast, Bloom claimed that much of the nation has moved toward legalization of cannabis. In short, Bloom made a persuasive argument that KOOL brands’ star had fallen, while Bloom Brands’ star was rising such that any confusion was not only unintentional (a Sleekcraft factor), but would actually hurt Bloom’s image (and benefit KOOL’s). This argument is persuasive and arguably spans numerous of the Sleekcraft factors, as it goes to the strength of marks, actual confusion, defendant’s intent in selecting the mark and likelihood of expansion into other markets. Perhaps KOOL’s best retort fits within the eighth Sleekcraft factor—likelihood of expansion into other markets—because even assuming menthol cigarettes are forever on their way out, after 88 years, KOOL should have the right to expand its use of the interlocking “OO”s to cannabis if it decides to do so in the future. Judge Wright picked up on a corollary to this potential retort during the June 7 hearing when he questioned whether ITG’s “goodwill could be harmed for the straight-laced among us who might now feel that KOOL has gone into the cannabis market and find that objectionable even in California?” From a purely theoretical standpoint, I would have liked to see how this dispute played out. Among geriatric Millennials and Generation X, KOOL is a strong mark and there is good reason to believe a strong likelihood of confusion exists. And as previewed by Judge Wright, that same demographic might be offended if it mistakenly believed KOOL had ventured into cannabis, which could damage KOOL’s goodwill. On the other hand, Bloom is not wrong that among the younger demographic, KOOL has very little, if any, brand strength largely as a result of the strict limitations placed on cigarette advertising since the late 1990s. And the so-called “straight-laced” from this younger demographic is also more likely to view menthol cigarettes as the evil, and cannabis as the good, such that any actual consumer confusion could actually benefit KOOL, and harm Bloom, among that demographic. One also cannot help but wonder whether an unwritten, ninth, non-Sleekcraft factor would have tipped the scale in favor of KOOL and against Bloom here. While the majority of the states have legalized cannabis in one form or another, the federal government has not. If he had been forced to decide whether to issue a preliminary injunction against Bloom on the original papers alone, curious whether Judge Wright would have leaned toward issuing the injunction simply because Bloom sells a federally illegal product. Regardless, Judge Wright did the parties a huge favor by forcing them to confer and find a business solution to share the pain equally, which ultimately led to a settlement. Judge Wright even commented that he was tired after every hearing of half of the people “going away pissed off,” and after he apprised the parties that if either side acted unreasonably he’d decide against the unreasonable party, he sent them off to figure it out and gave them time to do it. And they did. Both sides benefited from Judge Wright’s pragmatic approach, and, in the end, “cooler” heads prevailed. Kudos to all.

    Coca-Cola Company has a rich history and well-established global brand in its products originating in the U.S. It has also purchased and invested in the development of other brands and distribution of beverage products outside of the U.S., including in India. Coca-Cola entered the market in India through the acquisition of the marks THUMS UP and LIMCA, because when it initially expressed interest in selling its Coke-branded products in India, the Indian government required companies to disclose the full formula of the products. Instead, in the 1990s, Coca-Cola acquired the LIMCA (lemon-lime soda) and THUMS UP (cola) marks and logos featured above, along with the tagline, that had been introduced and made popular in India since the 1970s by a predecessor-in-interest. The THUMS UP product enjoys a significant market share in India and is one of the world’s best-selling beverages. The LIMCA soft drink is one of the best selling carbonated lemon-lime beverages in India. Both marks have achieved “well-known” status established through the high courts in India, and Coca-Cola owns trademark registrations for the marks in India and in other countries outside of the U.S. Third parties also import both products into the U.S. and focus sales of the products to Indian-American consumers. Coca-Cola was not directly making sales of the products in the U.S. and did not own registered rights in either mark in the U.S. at the time it filed petitions to cancel registrations owned by respondent Meenaxi Enterprise, Inc. (although Coca-Cola has since filed trademark applications for the marks in the U.S.). Meenaxi was founded in 2003 and is owned and operated by two Indian-American brothers who described their business as a “purveyor of and distributor of food products” that are “manufactured in India and distributed primarly to Indian grocers in the United States.” The company advertised its products in a monthly magazine focused on the “Indian Community.” Meenaxi obtained United States registrations for the LIMCA and THUMS UP trademarks, initially claiming during the cancellation proceeding that it came up with the names independently. One of the brothers later conceded in testimony that he had tasted the products in his college days in India and was aware of the brands. Coca-Cola filed petitions for cancellation of the registrations in the Trademark Trial and Appeal Board under Section 14(3) of the Trademark Act. This section provides that a registration is subject to cancellation if the mark “is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used.” To state a claim under Section 14(3), it is not sufficient to allege the willful use of a confusingly similar mark. Rather, the alleged misrepresentation must involve the deliberate passing off of goods as those of another. It is a blatant misuse of the registered mark in a manner intended to trade on the goodwill and reputation of another. To prevail on a claim under Section 14(3), a petitioner must establish: The trademark originated with the Petitioner; That the origin of the trademark was falsely designated by the Registrant; That the false designation of origin was likely to cause consumer confusion; and That the Petitioner was harmed by the Registrant’s false designation of origin. The Coca-Cola case presented a factual scenario similar to Bayer Consumer Care AG v. Belmora LLC. In Bayer, an unauthorized entity in the U.S. registered and marketed products under Bayer’s FLANAX mark to Hispanic consumers because the mark and products were well-known to consumers in Mexico. Even though Bayer was not selling products under the FLANAX trademark in the U.S., the courts and the TTAB found that it had met the elements of a claim of misrepresentation, leading to the cancellation of Belmora’s registration (the final stages of which are currently before the TTAB). In that case, it was established that if a third party is using a trademark in the U.S. to misrepresent to U.S. consumers the source of the registrant’s products as originating with the petitioner, the petitioner suffers actionable harm and damage through the loss of the ability to control its reputation. The record in the Bayer case clearly established that the reputation of the Mexican FLANAX mark did not stop at the Mexican border. The outcome in the precedential decision from the TTAB involving Coca-Cola’s THUMS UP and LIMCA marks is consistent. Not only did Meenaxi adopt marks owned by Coca-Cola with explanations that were found lacking in credibility, it also adopted a tagline and logos that were identical or nearly identical to those owned by Coca-Cola for the beverage products. In addition, Meenaxi had a pattern of such behavior and in testimony revealed that it had adopted the marks of others from the marketplace in India at least four other times and sought registrations for those marks in the USPTO. With all of those factors in mind, the TTAB found it highly unlikely that Meenaxi’s adoption of all of these marks, logos, and taglines were an unintended coincidence. Rather, the evidence strongly suggested that Meenaxi sought the registrations of others in an effort to trade on the goodwill of the prior registrants. Meenaxi’s course of conduct belied its excuses that consumers in the U.S. were not aware of Coca-Cola’s LIMCA and THUMS UP marks, and established that it clearly sought to capitalize on the awareness of Indian-Americans of the well-known marks. The TTAB accordingly granted Coca-Cola’s petitions to cancel the registrations for the LIMCA and THUMS UP marks owned by Meenaxi. Takeaways Owners of trademarks outside of the U.S. are not required to sell products bearing the marks in the U.S. to have standing to petition to cancel the registered marks used by another party to misrepresent the source of the goods. Trademark owners should keep an international perspective on trademark enforcement strategies and take action against U.S. registrants exploiting the reputation of marks that have gained fame and renown in other countries.

In the much-anticipated Hasbro Inc. v. EUIPO (T-663/19) decision, the General Court of the European Union announced a new approach to evaluating bad faith in trademark filings and signaled a more aggressive stance toward the practice of “evergreening.” The dispute centered on Hasbro’s registered EU trademark (“EUTM”) for the word mark MONOPOLY. Hasbro registered this mark in 2011 in classes 9, 16, 28, and 41, while at the same time owning three existing EUTMs filed in 1998, 2009, and 2010 for the MONOPOLY mark in classes 9, 16, 25, 28, and 41. Because the 2011 registration listed additional goods and services falling within the same classes as the existing registrations, Hasbro was able to extend its existing protections while avoiding the cost and administrative burden of showing genuine use outside the initial five-year grace period available for all EUTMs as protection against non-use cancellation actions. This re-filing strategy, known as “evergreening,” has long been controversial. While the court in Hasbro did not make an outright determination on the permissibility of evergreening, it fired a warning shot that should cause trademark owners to re-evaluate their filing strategy, lest they end up in Hasbro’s position with an invalidated mark after costly litigation. The Court found Hasbro’s use of evergreening for the sake of administrative convenience to be evidence of a bad faith subversion of the principle of undistorted competition at the heart of the EUTM system. In addressing Hasbro’s evergreening of the MONOPOLY mark, the Court looked to EU Regulations governing the EUTM regime, which treats registrations filed in bad faith as invalid. Recent EU case law has provided greater clarity on the meaning and required proof of bad faith in the EUTM context, but the Hasbro decision breaks new ground of its own. First, the Court in Hasbro found that the factors cited in the earlier Court of Justice decision Chocoladefabriken Lindt & Sprüngli (C-529/07) were neither exhaustive nor necessary evidence of bad faith. Instead, it reasoned that the Chocoladefabriken factors were merely exemplary and that the determination of bad faith rests on objective record evidence of the subjective motivations of the trademark applicant and a departure from accepted principles of honest commercial practices. In Hasbro this standard was met because a Hasbro employee gave testimony that a partial motivation for the company’s filing strategy was to mitigate the administrative burden of showing genuine use of the prior marks. The Court found that this was evidence of intent to undermine the EUTM regime’s objective of ensuring undistorted competition and that it was sufficient to establish Hasbro’s bad faith in filing for the 2011 mark. The definition of bad faith in this decision makes evergreening a riskier strategy for EU trademark filers by expanding its scope and creating greater uncertainty. Second, the Hasbro decision also shakes up the role of bad faith for EU trademark applicants by appearing to lower the burden of rebutting a presumption of good faith. While the Court is careful to reaffirm the general presumption that applications for trademark registration are filed in good faith, its finding of bad faith on the apparently sole basis of testimony from a single employee that administrative ease was a motivating factor in filing suggests that the evidentiary requirements to rebut the good faith presumption may be lower than previously suggested by the case law. Indeed, future filers should take steps to prepare affirmative evidence of good faith, including evidence establishing genuine use of existing registrations and a clear scope of goods and services covered in new applications. Hasbro does not prohibit repeat filing of a mark, but it does make the practice of evergreening trademarks riskier, as it significantly increases the possibility that a re-filer may face a bad faith challenge, resulting in the inability to re-file or renew the proposed mark. What still remains unclear, however, is just how much the successful bad faith challenge to the MONOPOLY mark in Hasbro was dependent on case-specific facts. Whether an applicant pursuing invalidation can prevail on a claim of bad faith in the absence of direct testimony from a company officer conceding that it was intentionally pursuing a re-filing strategy for improper reasons is an open question. As this area of the law develops, EU trademark owners should consider revising their filing strategy to guard against bad faith challenges or take on other owners who may be acting in bad faith.